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Philly Fed's Harker: Further small rate hikes may be needed to curb inflation
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Philadelphia Federal Reserve Bank President Anna Harker stated that further small interest rate increases may be appropriate to bring inflation back to the central bank's 2% target. In prepared remarks for a Philadelphia event on Thursday, Harker said, "Looking ahead, if conditions evolve as I expect, further modest tightening may be appropriate." She noted that the Fed's recent unanimous decision to raise the benchmark rate to 3.75%-4% was necessary because core inflation, excluding food and energy, remains "stubbornly high." Harker, a voting member of the Federal Open Market Committee this year, said the adjustment brings policy closer to the level needed to return inflation to 2% while balancing risks to the labor market. She described the U.S. economy as resilient to shocks, with solid output growth and a labor market near full employment, and cited signs of "growing momentum."
Source report
Philadelphia Federal Reserve Bank President Anna Harker indicated that additional interest rate increases may be necessary to bring inflation back to the central bank's 2% target.
"Looking ahead, if conditions evolve as I expect, further modest policy tightening may be appropriate," Harker said in prepared remarks for an event in Philadelphia on Thursday.
Federal Reserve officials voted unanimously last week to raise the benchmark interest rate to a range of 3.75%–4%, marking the first rate hike of 2023.
Harker, who has a vote on monetary policy this year, said the rate increase was necessary because core inflation—which excludes energy and food prices—remains "stubbornly elevated."
"This adjustment brings policy closer to where I believe it needs to be to bring inflation back to 2% while balancing the risks to inflation and the labor market," she said.
Harker noted that the U.S. economy continues to show resilience in the face of shocks, with solid output growth and a labor market near full employment. She also pointed to signs of "growing momentum" in the economy.
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Philadelphia Fed’s Harker signals further rate hikes as inflation stays stubbornly high