Federal Reserve Bank of Philadelphia President Patrick Harker said he’s been disappointed that US inflation hasn’t slowed by more and was ready to take further steps to bring it down if necessary.
(Bloomberg) — Federal Reserve Bank of Philadelphia President Patrick Harker said he’s been disappointed that US inflation hasn’t slowed by more and was ready to take further steps to bring it down if necessary.
“Since the full impact of monetary policy actions can take as much as 18 months to work its way through the economy, we will continue to look closely at available data to determine what, if any, additional actions we may need to take,” Harker said Tuesday in a speech in Philadelphia.
“But make no mistake: We are fully committed to bringing inflation back down to our 2% target,” he said.
Harker, who votes on policy this year, sounded less emphatic than some of his colleagues on the need to take more measures against inflation, even amid recent bank turmoil that could slow growth by making credit less available.
Read more: Fed Officials Signal Divide Over Whether to Hike Rates Again
Speaking to the Wharton Initiative on Financial Policy & Regulation, Harker said strong jobs gains and an unemployment rate of 3.5% last month show the nation is “effectively, at full employment.” Yet inflation has been receding only slowly, “which is disappointing, to say the least.”
“To combat inflation, the Fed is working to slow the economy modestly and bring it more in line with supply,” he said.
Officials raised rates by a quarter percentage point last month to a target range of 4.75% to 5% and forecast they would end the year at 5.1%, according to their median projection, implying one more such move. They next meet May 2-3.
Answering questions following his opening remarks, Harker repeated that he favored “get rates above 5 and then sit there for a while.”
“If we see inflation not budging, then I think we’ll have to take more action,” he said. ““But at this point, I don’t see why we would just continue to go up, up, up and then go, whoops! And then go down, down, down very quickly. Let’s sit there.”
(Updates with more Harker comment in final paragraph.)
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