Fed's Harker: Get rates above 5% and then pause

• Fed is increasing its odds for getting to a soft landing Soft landing A "soft landing" in the economy refers to a situation where economic growth slows down, but does not fall into a recession. This is often the desired outcome for policymakers, as it allows them to make adjustments to the economy without causing widespread job losses or other negative effects associated with recessions.An example of a soft landing in the economy occurred in the United States between the years of 2004 and 2006. During this time, the Federal Reserve raised interest rates to cool do A "soft landing" in the economy refers to a situation where economic growth slows down, but does not fall into a recession. This is often the desired outcome for policymakers, as it allows them to make adjustments to the economy without causing widespread job losses or other negative effects associated with recessions.An example of a soft landing in the economy occurred in the United States between the years of 2004 and 2006. During this time, the Federal Reserve raised interest rates to cool do Read this Term
• Get the Fed funds rate to 5% and then pause
• His base case scenario is that there is not a recession
• Unsure about how far funds rate have to go above 5%
• Fed does not need 50 basis point Basis point A basis point is a unit of measurement used to express the change in value of a financial instrument, such as a bond or a loan. One basis point is equal to 0.01%, or one one-hundredth of a percentage point. For example, if the interest rate on a bond increases from 5% to 5.25%, that is an increase of 25 basis points. It is often used in the context of interest rates, yield, and credit spreads. The short-hand for a basis point is bps and on a trading floor you will hear them referred to as ' A basis point is a unit of measurement used to express the change in value of a financial instrument, such as a bond or a loan. One basis point is equal to 0.01%, or one one-hundredth of a percentage point. For example, if the interest rate on a bond increases from 5% to 5.25%, that is an increase of 25 basis points. It is often used in the context of interest rates, yield, and credit spreads. The short-hand for a basis point is bps and on a trading floor you will hear them referred to as ' Read this Term hikes right now
• Not concerned wage issues will spill into inflation
• We do not need to keep raising rates at the pace we were

The Fed comments are not panicking after the stronger-than-expected jobs report. The game plan to get rates to 5% – 5.25% seems to be the central tendency (although the door remains open for something more).

The US CPI data will be released on Tuesday with expectations of 0.5% versus 0.1% last month. The core is expected to increase by 0.4% which is the same as last month.

Of note is the prior month's were revised higher due to seasonal adjustments. The initial CPI was reported at -0.1% but was revised to +0.1% this morning. The core was initially reported as 0.3% but was revised to 0.4%.