Patrick Harker, president and CEO of the Federal Reserve Bank of Philadelphia.
- Inflation is our top priority
- We are going into this with everything except inflation looking good
- There is the risk of negative growth
- I still think we can have a soft landing
- This economy can withstand a measured, methodical tightening of financial conditions
- I am less worried about a deep recession, not forecasting it
Harker says he is not forecasting a deep recession. I wonder why he qualified 'recession' with 'deep'? Uh-oh.
- We have got to grind demand down
- we don't want to overdo it, but we have to act
- long-term inflation expectations are not unanchored
- lowering demand will have an impact on the labour market
- but if we bring down the number of jobs per worker from 2 to 1, from 1.5 to 1, that's not necessarily bad
- the labour market will soften some, but the goal is not to let it become recessionary
The overconfidence expressed by these officials is something to behold. Fed officials have just come off a MASSIVE ****-UP over transitory inflation, which delayed lift off and is thus doing more damage than it otherwise might. And yet, now they are gobbing off about fine-tuning managing the economy ahead. Bring jobs per worker down ... let them eat cake?