Patrick Timothy Harker, chairman of the Federal Reserve Bank of Philadelphia, says he does not expect the federal funds rate to increase before the Fed’s bond tightening is complete.
“I don’t expect the federal funds rate to go up before the tapering is complete, but we are monitoring inflation very closely and are prepared to take action, should circumstances warrant“Harker said in remarks prepared for a virtual event organized by the Economic Club of New York.
Reuters reported that the official also said that ”we expect inflation to moderate over the next year as supply and demand imbalances caused by the pandemic resolve“echoing a message shared by Fed officials last week when they announced that they will begin to reduce the pace of asset purchases by $ 15 billion a month.”
Harker’s key comments
We expect inflation to moderate next year as supply chains reactivate and bottlenecks ease.
The US economy should see another accelerated growth to over 4% next year if another major wave of covid-19 can be avoided.
We hope that the economic growth is back to between 2% and 3% in 2023.
We expect more people to return to the workforce as deferral programs are exhausted.
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