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1/20/2017, 4:09 PM (Source: TeleTrader)
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Fed's Harker sees three rate hikes in 2017

President of the Philadelphia Federal Reserve Patrick Harker (pictured) said on Friday he expects three "modest" interest rate increases this year, assuming that the labor market continues improving and that inflation reaches the central bank's 2% target.

The United States economy is displaying considerable strength, the policymaker said in a speech delivered to the New Jersey Bankers Association. He noted that inflation is moving towards the Fed's objective, as the core index on personal consumption expenditure, the bank's preferred inflation measure, has risen to 1.7%, with expectations reaching 2%. However, growth and productivity are still held back by the low labor participation rate, and this would call for legislative action, the rate-setter warned.

All in all, the new year has started off "on a good foot," Harker, who is a voting member of the Federal Open Market Committee in 2017, concluded.

 

Baha Breaking the News (BBN) / IB