Federal Reserve Bank of Philadelphia President Patrick Harker believes that policymakers are nearing the point where they will have rates restrictive enough to stabilize prices, but there is still work to do. He spoke after the consumer prices climbed to a higher-than-expected 6.4% in January from a year earlier. Harker believes that monetary policy will work once the policy rate becomes restrictive enough.
Harker: Inflation Finally Cooling Down
Harker is encouraged by the progress in bringing inflation down, stating that there are some signs that it is cooling. He also praised the labor market's resilience but predicted that unemployment would rise slightly.
Fed Update Coming Next Month
Fed officials will update their forecasts next month, and traders are already pricing in quarter-point increases at the March and May policy meetings.
Harker Supports Slow-Rate Hikes
Harker supports a slow and cautious approach to raising rates, and he says the days of raising rates 75 basis points at a time have passed. Just at the last meeting, he voted for a hike of 25 basis points, which he considers closer to cruising speed when it comes to tightening.