7/12/2018, 6:56 PM (Source: TeleTrader)
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Fed's Harker: Inflation could warrant fourth hike

Patrick Harker, president of the Federal Reserve Bank of Philadelphia, told the audience at an economic summit in Idaho that there is no notable risk of recession in the United States in the following months. Speaking on Thursday, he raised the issue of the yield curve's flattening and expressed concern about the effect of the potential fourth interest rate increase this year. The policymaker nevertheless said he would back the move in case of a surge in inflation.

The central bank raised the benchmark range for the second time in June, at a usual 0.25 percentage point pace, and markets are not decisively betting on a fourth move by December. This year's nonvoting member at the Fed's panel said he would be worried if annual inflation tops 2.5%.

Policymakers should lift rates "slow and steady," he added. Turning to the trade disputes between the US and its major partners, Harker said it would be a challenge if they dent confidence. In his view, the neutral interest rate is in the range of 3%, while unemployment could decline to as low as 3.5% from the current 4%.

Breaking the News / IT