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Fed: We do not rule out lowering rates in May – Patrick Harker

The president of the Philadelphia Federal Reserve (Fed), Patrick Harker, noted on Thursday that, While the Fed is getting closer to cutting rates, policymakers remain unsure when specifically that might happen..

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The Fed is getting close to cutting rates, but doesn't know when.

The trend towards disinflation has picked up, The Fed is in the “home stretch” towards 2% inflation.

The latest CPI figures show an uneven advance in inflation.

Harker needs more confidence in inflation progress.

Cutting rates too soon remains the biggest risk for the Fed.

Harker agrees to slow the pace of balance sheet contraction before stopping it completely.

US GDP remains stronger than expected.

The Fed can keep holdings for now, in no rush to cut them.

Harker focuses especially on the labor market, employment will determine when to cut.

A rate cut in May is possible, but it is not the current forecast. A couple more months of positive data would convince Harker of the need for a cut.

The Fed is close to cutting, it just needs a couple more meetings.

Source: Fx Street

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