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I am committed to “methodically” raising interest rates back to neutral, which is around 2.5% — Patrick Harker

Philadelphia Fed President and FOMC member Patrick Harker he said on Wednesday that he is committed to methodically raising interest rates back to neutral, which he expects to be around 2.5%, Reuters reported.

Shrinking the balance sheet will also remove financial accommodation, he added, noting that we want to slow the economy in a way that is not so aggressive that we risk slipping back into recession.

Regarding inflation, Barkin said he focuses on its spread in the quantity of goods as an indicator of whether conditions are improving.

He is also focusing on demand and whether it will show signs of weakening as the Fed raises rates, he added, noting that retailers say there doesn’t seem to be much “trading down” among consumers for cheaper goods, despite despite price increases.

Source: Fx Street

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