Inflation is proving to be a "troublemaker" for the central bank, Richmond Federal Reserve President Tom Barkin said Tuesday. And the inflationary pressures from businesses struggling with higher operating costs are still building in some areas.

In prepared remarks for the CFA Society of Baltimore, Barkin said Tuesday that while "not that much" had changed in the inflation trajectory in the most recent data, that was precisely the issue.

The demand picture in the U.S. hasn't changed much, with consumer spending and business investment remaining steady. That indicates that monetary policy isn't all that restrictive. Inflation, meanwhile, remains more than a percentage point above the Fed's 2% target. And he's hearing from businesses that pricing pressures are building, in large part because there are more costs to pass on these days.

That's a "problem," Barkin said, and noted it was "precisely why" it was appropriate for the Federal Open Market Committee to raise the fed funds range by a quarter of a percentage point to 3.75% to 4% last week.

"The risks to inflation outweigh the risks to maximum employment. That's why we raised rates," Barkin said. Barkin isn't currently a voting member of the FOMC, but will be next year.

Barkin compared the two sides of the Fed's dual mandate-price stability and maximum employment-to raising two children. "You care about each one. You keep an eye on both. But on any given day, you have to focus a little more on one or the other, depending on who needs the most attention," Barkin said.

Right now the "troublemaker" is the price stability side of the Fed's mandate. More than 60% of the components tracked in the personal consumption expenditures price index are rising faster than 3% from a year ago, Barkin said. The Fed's 2% inflation target is benchmarked to the annual growth rate of the PCE index.

"There was an argument that inflation would return to target on its own, without any additional help from the Fed," Barkin said of the discussions at last week's meetings. "The idea was that as inflationary shocks passed, so would high inflation."

But he said that the biggest issue with looking through shocks at the moment is that they're not proving to be short-lived, or one-off events. This echoed comments by Chicago Fed President Austan Goolsbee on Monday.

"These days, when you see a large supply shock, it's usually more accurate to assume it will be persistent than to assume it will quickly go away. That's certainly been the U.S. experience over the last six years," Goolsbee said.

Barkin said that he expects shocks from things like the conflict in the Middle East, new tariffs, and even the artificial intelligence buildout to pass, but it will take time. "In the interim, there is a risk that current elevated levels of inflation could affect future inflation," Barkin said.

He's hearing from businesses that they're readying price increases as they deal with higher costs from a variety of sources, from higher tariffs to oil prices to healthcare.

"During the post-pandemic supply challenges, businesses rediscovered the pricing lever. So, today, many are willing to test if they can't use it again," Barkin said. "When they try, they are finding less resistance than they did prepandemic, especially from the wealthy and from business customers."

As for the path ahead, Barkin said that he's keeping an open mind. Inflation could come back down in short order, but it could also prove stubborn. Bottom line, the FOMC is "committed" to returning inflation sustainably to the 2% target.

"Last week's hike will help. Will additional hikes be required, and how many? We'll see," Barkin said.