Philadelphia Fed President Patrick Harker said yesterday, “I expect that we will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed.” “Hikes of 25 basis points will be appropriate going forward,” he said. And, “let’s get above 5% and sit there for a while”.
While risks to inflation remain on the upside, he noted, “we are starting to see inflation come down across a spectrum of goods.” He expects core inflation to decline to 3.5% this year, and 2.5% next, then get back to target in 2025. He also said the economy should grow 1% this year, without falling into recession.
