Tom Barkin, President of the Federal Reserve (Fed) Bank of Richmond, said that the Fed will go meeting by meeting, if gas prices rise, that is inflationary and the Fed will have to decide how long that lasts in an interview for Bloomberg TV on Thursday.

Key takeaways

2.8% productivity is still a pretty good number.

Do not have a sense yet of the implications of the Iran war on the economy.

Gas prices still matter for sentiment and can crowd out other consumption.

The Fed will go meeting by meeting; if gas prices are up that is inflationary and the Fed will have to decide how long that lasts.

Recent inflation data does raise doubts about whether the Fed is finished its inflation fight.

Corporate margins are steady in part because productivity is helping firms absorb the hit from tariffs.

The last couple months of employment data has been reassuring.

Fed policy is still modestly restrictive, but demand does remain healthy.

Instinctively like the idea of a smaller Fed balance sheet, but subject to not having adverse market reactions and being able to control interest rates."