Philadelphia Fed President Patrick Harker suggested a pause on rate changes in the coming months, emphasizing the importance of allowing current monetary policy measures to take effect.
He said today, “Absent any alarming new data between now and mid-September, I believe we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work.”
He also cautioned against expecting immediate rate reductions, noting, “The pandemic taught us to never say never, but I do not foresee any likely circumstance for an immediate easing of the policy rate.”
Harker indicated that there might be a slight rise in the unemployment rate, which was most recently recorded at 3.5% in July, along with a deceleration in the GDP’s growth rate.
Nonetheless, he remains optimistic, stating, “In sum, I expect only a modest slowdown in economic activity to go along with a slow but sure disinflation.”
“I do see us on the flight path to the soft landing we all hope for and that has proved quite elusive in the past, he added.