Philadelphia Fed president Patrick Harker speaking in an interview with the Wall Street Journal
Fed Harker in a narrow view with the Wall Street Journal says that he is in the camp of starting the tapering process. Harker is not a voting member in 2021.
- Supports start a bond buying pullback later this year
- Interest rate rises lie some ways in the distance
- Would like to see the tapering process begin before the Fed raises interest rates
- Would like to see a slow methodical process
- The main challenge now for the economy isn't supporting demand, but sorting out supply to meet it in that regard the Fed's asset buying doesn't offer much help and could even come with risks for financial stability
- Supports the Fed trimming both the treasury and mortgage-backed bonds equally (the Fed currently buys $80 billion per month of treasuries and $40 billion per month of mortgage backs)
- Does not see rates rising until 2023
- Inflation is key to his outlook
- Still believes that inflation surges tied to reopening issues and will abate by next year
- Sees growth of 7% this year and about 3.5% next year
- Sees unemployment rate falling from 5.8% currently to 4.5% this year and 3.8% by 2023
- Sees inflation at 3% to 3.2% this year and ease back toward the 2% Fed target next year
