16 Feb 2016
Fed’s Harker: Might be prudent to wait stronger inflation before a second hike
Patrick Harker, President of the Federal Reserve Bank of Philadelphia, who took office in July, said on Tuesday it might prudent to wait until inflation picks up before raising rates again.
“Although I cannot give you a definitive path for how policy will evolve, it might prove prudent to wait until the inflation data are stronger before we undertake a second rate hike”, said Haker in a speech. “And attentiveness to the data will be a key factor in all of my future policy recommendations as well. If financial headwinds dissipate quickly and inflation picks up a bit more aggressively, it will require a slightly more aggressive approach to policy.”
Harker also said his overall view of the economy remains “upbeat”. However he acknowledged the risks to his outlook “are tilted to the downside”. The nervousness in the financial markets and the increased caution that it may cause could imply somewhat slower growth, at least in the first half of the year, he commented.
“Although I cannot give you a definitive path for how policy will evolve, it might prove prudent to wait until the inflation data are stronger before we undertake a second rate hike”, said Haker in a speech. “And attentiveness to the data will be a key factor in all of my future policy recommendations as well. If financial headwinds dissipate quickly and inflation picks up a bit more aggressively, it will require a slightly more aggressive approach to policy.”
Harker also said his overall view of the economy remains “upbeat”. However he acknowledged the risks to his outlook “are tilted to the downside”. The nervousness in the financial markets and the increased caution that it may cause could imply somewhat slower growth, at least in the first half of the year, he commented.