Philadelphia Fed Pres. Patrick Harker
- Fed is increasing its odds for getting to a soft landing
- 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 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%.