A closer look at what needs to happen before interest rate cuts.

For marketplace, I'm Novasafo in for David Brancaccio.

Many on Wall Street expect the Federal Reserve to start cutting interest rates in March, but Richmond Fed President

Tom Barkin told Marketplace's Nancy Marshall Genser that a lot is writing on these first few months of the

year.

In a speech on Friday before the Maryland Bankers Association, Richmond Fed President

Barkin outlined a number of risks to a soft landing, like if consumers and businesses

pull way back on spending, or if there's a shock to the economy.

After the speech, Barkin told me there's also the problem of businesses

that got used to the era of rising prices

and want to keep charging more.

They're open to the notion that that era is over. prices and want to keep charging more.

They're open to the notion that that era is over, but they're not just going to give it up without

having to prove that.

So they're trying and I think this first quarter will be a very important quarter on this. A lot of these price increases

happen at the first of the year.

Barkin says those price hikes may not stick if customers refuse to pay them or if competitors

start charging less. If customers and competitors react in ways that mean these price increases aren't effective,

then I think this era will be through and we'll get to the kind of stability that certainly

I want to get to, but we'll see.

Markin says the owner of a chain of gyms told him he's raising his fees 9%.

Barkin will talk to him again in three weeks to see if new members are willing to pay his

...