Philadelphia Fed President Patrick Harker said yesterday that he saw current fall in inflation as “transitory. And he continued to see “one increase at most this year, possibly one, at most”, regarding interest rates.
But he also emphasized that “If any component of the outlook were to affect my view on the appropriate path of monetary policy, it would be inflation.” For now, “we’re not there yet”. Harker said “it would take more data to convince me” to change the policy path.
On trade, Harker also warned that tariff is “not a healthy thing for the economy overall”. And trade tensions are part of an “umbrella of uncertainty” that is weighing on businesses and markets.
Separably, Dallas Fed President Robert Kaplan said current dip in inflation should be just transitory. And, he’s not inclined to cut interest rate to deal with current sluggish inflation. Though, to him, there is no bias to move interest rate in either direction.
Kaplan also noted that trade uncertainty is impacting on firms’ supply chains. And it has chilling effect on US industries. Though, trade uncertainty is not yet having material impact on US GDP. He’s also concerned with deceleration in global economy.