Philadelphia Fed President Patrick Harker said there is “no compelling reason right now” for having a total of four rate hikes this year, “unless we see inflation start to accelerate rapidly. But he is “open” to that. He added that “if we see inflation starting to go past 2.5%, we have to act.” But “absent that” he believed there are “lots of good reasons to hold off”.
In particular, he pointed out that further rate hike could push 2-year treasury yields above that of 10-year debt. And, he warned that “if there is a risk of inverting the yield curve then we should try to avoid that.”
