Fed's Harker Strikes Optimistic Tone on Economy, Sees No Rate Changes
Federal Reserve Bank of Philadelphia President Patrick Harker expressed confidence in the U.S. economy's resilience at a speech in the Bahamas. He emphasized the importance of maintaining current interest rate policy to combat inflation.
Harker highlighted data indicating continued economic strength, including robust growth and a balanced labor market. While inflation remains elevated, he believes it is on a downward trajectory, supported by "resilient" growth.
"These are reasons enough for holding the policy rate steady," Harker said, adding that he anticipates inflation easing to the Fed's 2% target in the years ahead.
He reiterated his support for the Fed's decision to maintain its interest rate target within the 4.25%-4.5% range last month. While acknowledging some inflationary pressure related to President Trump's policies, Harker emphasized the need for caution due to economic policy uncertainties.
"With regard to inflation, we simply do not yet know what, if any, impacts we may see from new economic policies and priorities," he said.