10/20/2022, 6:19 PM (Source: TeleTrader)
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Fed's Harker sees lack of progress in inflation battle

Federal Reserve Bank of Philadelphia President and Chief Executive Officer Patrick Harker said on Thursday that the federal funds rate will be "well above" 4% by the end of 2022 due to the central bank's "frankly disappointing lack of progress on curtailing inflation."

The Fed will stop raising interest rates "sometime next year," according to remarks he delivered before the Greater Vineland Chamber of Commerce in Vineland, New Jersey. The restrictive stance that the central bank will take at that point should remain in place "for a while to let monetary policy do its work," Harker underlined.

He then estimated that GDP growth will be flat this year, followed by 1.5% and around 2% in 2023 and 2024, respectively. The unemployment rate is expected to hit its peak of 4.5% in 2023 and should decline to 4% in 2024, "which suggests that even as we tighten monetary policy, labor markets will stay quite healthy," Harker insisted.

Baha Breaking News (BBN) / MS