03:46 PM EDT, 10/02/2024 (MT Newswires) -- Inflation and the labor market in the US continue to pose "significant uncertainty," with annual core prices unlikely to fall much further until next year, Tom Barkin, president of the Federal Reserve Bank of Richmond, said Wednesday.

Last month, the central bank's Federal Open Market Committee lowered its benchmark lending rate by 50 basis points, its first cut since March 2020. Policymakers tightened monetary policy from March 2022 through July 2023 to fight inflation.

"While we have made real progress, there remains significant uncertainty on both inflation and employment," Barkin -- an FOMC voting member this year -- said in remarks prepared for a speech in Wilmington, North Carolina. Barkin said that the 12-month headline personal consumption expenditure inflation is now at 2.2%, down from its peak of 7.1% in June 2022, while the core measure is at 2.7%.

The 12-month core inflation is not expected to cool "much further" until 2025, as the economy is still lapping low readings from late 2023, according to Barkin.

"I'm not yet confident nor cynical enough to declare victory," he said, noting that inflationary pressures have not fully vanished. Factors such as recent union actions, a pullback in labor supply, and an escalating geopolitical situation in the Middle East could drive inflation higher.

The hiring rate has decreased to 2013 levels, Barkin said. "Job gains are being continually revised down, and those sectors (like health care) that have been catching up from pandemic shortages are moderating their growth."

Overall, US economic activity has continued to be "robust," he added.

Official data are expected to show Friday that the economy added 150,000 nonfarm jobs in September, which would mark an acceleration from the 142,000 gain posted for the previous month, according to a survey compiled by Bloomberg.

"I see our September (rate) decision as a recalibration to a somewhat less restrictive stance," Barkin said. For 2024, the median member of the FOMC projected another 50 basis points of rate cuts last month, assuming the data come in as expected, according to Barkin.

"As we decide how fast to move and how far to go during this rate-reduction cycle, we are just going to need to be attentive and learn as we go," he said.