Richmond Fed President Tom Barkin said Tuesday the Federal Reserve has "time to see" if the central bank's rate hikes to date will be enough to bring inflation back to its 2% goal.

“We are making progress on inflation,” Barkin said at a real estate roundtable in Washington, D.C. “We aren’t there yet, but we’re headed in the right direction … We have time to see if we have done enough or whether there’s more work to do.”

Barkin's comments come just over two weeks before the Fed's next policy decision meeting (Oct. 31-Nov. 1), at which investors expect the central bank to leave its benchmark interest rate unchanged, in the range of 5.25%-5.50%.

Barkin said Tuesday he supported holding rates steady at the conclusion of the Fed's September meeting in order to wait for more information — from data and conversations on the ground.

“If we under-correct, inflation reemerges. If we over-correct, we do unnecessary damage to the economy,” he said.

Read more: What the Fed rate-hike pause means for bank accounts, CDs, loans, and credit cards

Annual inflation as measured by the Consumer Price Index in September stood at 3.7% and 4.1% on a "core basis," which strips out the more volatile costs of food and energy. Over the last three months inflation has risen at a 3.1% annualized rate.

Barkin said Tuesday he sees an economy coming back into better balance than the official data suggests based on consumers and businesses he speaks to in his district.

Interest-sensitive sectors such as real estate are feeling the impact of higher rates. Businesses that sell to lower-income customers have told Barkin those consumers are stretched thin and reprioritizing their spending.

Barkin added that contacts say middle-income consumers are trading down and banks are feeling margin pressure — and have stepped back from riskier sectors, newer customers, and less profitable loans.

Still, the data, he said, points to a strong economy. Barkin cited what he called “solid” GDP growth of 2.1% and a low unemployment rate of 3.8%. Retail sales data out Tuesday morning also showed sales rose more than expected last month.

On the labor front, Barkin said parts of the job market are coming into better balance with employers finding it easier to hire workers while turnover is down. Wage pressures still exist, but have moderated from last year’s extreme levels.

“I am still looking to be convinced, both that demand is settling and that any weakness is feeding through to inflation," Barkin said. "These are particularly hard questions to answer today because there is somewhat of a disconnect between the data and what I hear on the ground."

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