Harker Holds to Call for Balance Sheet Roll-Off and Another Rate Hike Before 2018
Jun 27, 2017
In comments in London, Philadelphia Fed President Harker said he continues to expect the Fed to slow its reinvestments and raise rates one more time before 2017 comes to a close. He may revisit that outlook if inflation continues to disappoint but, for now, simply pushed the timing of when he expects inflation to reach the Fed’s target into 2018 as he believes the recent soft patch will prove to be transitory. Somewhat interestingly, he believes the relationship between unemployment and inflation still exists despite an acknowledgment that wages have disappointed even with unemployment at or below the natural rate.