Fed Harker: We are clearly in restrictive, we can sit there for a while

Philadelphia Fed President Patrick Harker recommended a pause in interest rate hikes at the upcoming FOMC meeting, stating. “It’s time to at least hit the stop button for one meeting and see how it goes,” he said yesterday.

Harker also noted, “I think we are at the point, or very close to the point now, where we are clearly in restrictive territory, and we can sit there for a while,” he explained. “We don’t have to keep moving rates up, and then have to reverse course quickly.”

Looking ahead, Harker expects the US economy to grow less than 1% this year, and anticipates unemployment rate, currently at 3.4%, to increase to around 4.4%. Additionally, he forecasts a decrease in inflation to 3.5% this year and 2.5% next year, predicting it to reach Fed’s 2% target only by 2025.