Philadelphia Federal Reserve Bank President Patrick Harker, in a virtual discussion with the Delaware State Chamber of Commerce on Friday, confirmed that disinflation is currently taking place. He advocated for maintaining the existing interest rates unless there are substantial shifts in economic indicators. Harker emphasized that even without changes, the current policy rates significantly influence improving economic and financial conditions.
Harker views restrictive policy rates as critical to curbing inflation and ensuring market balance. This comes after a significant rate hike in 2022, which has led the Fed to carefully reassess its policy. Officials decided to keep rates unchanged during their last meeting, but they hinted at another potential increase later this year.
However, a recent surge in bond yields might offset the need for further tightening. Despite an unexpected rise in the September consumer price index (CPI), Harker’s attention remains fixed on long-term data trends.
The Fed official expressed readiness to adjust policy based on evolving economic circumstances, including potential labor strikes. This suggests a flexible approach from the Federal Reserve towards managing interest rates and monetary policy in response to changing economic conditions.
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Source: Investing.com
