Fed Chair announces: 'The impact of high interest rates has not yet been seen'

Richmond Fed President Thomas Barkin said he expects high interest rates to further slow the economy and bring inflation down to the central bank's 2 percent target.

Barkin, who has a vote on monetary policy decisions this year, said in a statement on Monday that the strength of the labor market gives the Fed time to gain confidence that inflation is falling sustainably before lowering borrowing costs.

However, Barkin added that there is a risk that ongoing housing and services inflation could keep price increases high, as seen this year.

Barkin said, "I am optimistic that today's restrictive interest rate level can dampen demand enough to bring inflation back to our target. The full impact of high interest rates has not yet been seen."

New York Fed President John Williams said that interest rates will eventually be cut, but when that will happen depends on the totality of the data.

Citadel founder Ken Griffin also predicted that even if the Fed does not cut rates in September, a cut will certainly take place within this year.