Federal Reserve (Fed) Bank of Richmond President Tom Barkin noted early during the US market session on Tuesday that while inflation appears to be coming down, it might still get stuck above the Fed's target levels.

Key highlights

The Federal Reserve is in a position to respond appropriately regardless of how the economy evolves.

The Fed's focus may turn to upside inflation risks or to downside employment risks, depending on how economy develops.

From here, the labor market might be fine or might continue to weaken.

Inflation might be coming under control, or might risk getting stuck above the Fed's 2% target.

The US economy looks pretty good and the labor market looks resilient.

The Fed has started the process of recalibrating interest rates to somewhat less restrictive levels.