Philadelphia Fed President Patrick Harker On Thursday, he said he expects to raise rates three or four times this year, saying he is likely to fight inflation.
His idea is CNBC’s “Closing bell, ”Is consistent with the Federal Open Market Committee’s estimate for policy making released in December.
But the authorities then Possibility to increase by 3/4 percentage points In 2022, the Federal Reserve’s benchmark for overnight borrowing rates, Mr Harker said he could accept more.
“We need to take action against inflation. It’s more lasting than we thought a while ago. I’ve been away from the” temporary “team for a while,” he said. Told. Most of 2021 before pivoting towards the end of the year.
“I think it’s appropriate to take action this year,” Harker said. “three [hikes] I wrote it down, but four are not out of the question in my mind. “
Harker’s comment comes when a Labor Ministry report shows that inflation is skyrocketing throughout the US economy. Consumer price index increase rate is 7%, The highest year-on-year change since June 1982, Wholesale prices in 2021 rose 9.7%, The biggest move in data dating back to 2010.
Following the December meeting, the Federal Open Market Committee has set a schedule to consolidate monthly bond purchases by around March. Minutes released afterwards Some members also indicated that the Fed believes it should start reducing its balance sheet size.
However, Harker favors a slower approach to balance sheet problems. He waited until the Fed raised interest rates “for discussion” or four times, $ 8.8 trillion balance sheet As a result of asset purchases during a pandemic. Basis points are 1/100 percent points.
“I don’t want to do it all at once. I think it’s the wrong way to do it,” he said. “Let’s do it step by step.”
He said slow progress would ease the economy from the shocks that might result from the Fed’s retreat from the simplest monetary policy in its history. “If you move carefully and systematically, you can avoid killing the recovery, which is why I’m not in a position to raise rates and normalize the balance sheet at the same time,” he said.
Earlier that day, Chicago Federal Reserve Bank of Chicago Governor Charles Evans He also said he was accepting more, but saw the three rate hikes as the most likely.
“”[Three increases are] “It’s probably a good opening this year, depending on how the data is deployed,” Evans told reporters. “If the data doesn’t improve fast enough for inflation, it could be four. There is. “
Neither Evans nor Harker are voters of the FOMC this year, but they can express their views at policy meetings, and their views are part of the “dot plot” of interest rate expectations of members of the Commission.
Fed Harker calls for “action against inflation” and sees rate hikes three to four times
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