The US Federal Reserve is likely to approve “a series of deliberate, methodical” interest rate hikes this year, the chairman of the Federal Reserve Bank of Philadelphia, Patrick Harker, said on Tuesday.
Inflation is “much higher than … we would feel comfortable,” Harker said in comments preparing to be delivered to the Financial Stability Center in New York. “I expect a series of deliberate, methodical increases later this year,” in an effort to reduce inflation over the next two years from the current level of 6% to the Fed’s 2% target.
Harker did not say explicitly in his prepared remarks whether he believed these larger increases would be appropriate or how high the Fed’s policy rate should be raised by the end of this year.
He said some of the problems leading to high inflation may have begun to subside on their own, a potentially welcome development for the Fed that would argue against a rapid push for higher interest rates.
“There is some evidence in the data and in what we hear from our contacts that supply chain constraints are finally easing,” Harker said.
Most of Harker’s comments were devoted to a review of the COVID-19 pandemic developments in the housing and money markets.
Source: Capital
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