Philadelphia Fed President Patrick Harker said in a speech, “we’ll keep the federal funds rate very low and continue making more than $100 billion in monthly Treasury bond and mortgage-backed securities purchases. While the economic situation is improving, recovery is still a work in progress, and there’s no reason to withdraw support yet.
“With so much fiscal support and monetary accommodation, there is some upside risk to increased inflation, and we will continue to monitor that closely. But for now, I’m forecasting 2.3 percent headline inflation for 2021 with core inflation at 2 percent,” he added.
Later he added, inflation is “not only a number”, but also “the rate of change”. He said 3% is probably the maximum inflation he would like to see. But he’d be more comfortable with inflation at around 2.5%. “We don’t want inflation to run out of control,” he said.
