Harker Fleshes Out Dovish View In Exclusive MNI Interview

Philadelphia Fed's Harker (’23 voter) spoke to MNI exclusive interview that fleshed out his prior view from Aug 8 about potentially being at the point where we can be patient and hold rates steady. Some pertinent points:

• Can hold rates steady “for a while” with a view to holding “at least through end of year”, and that whilst he’s not ready to call the peak in rates he thinks it’s prudent to pause.
• He sees firms clearly losing some pricing power and with businesses cutting hours but trying to retain workers.
• Notably with long-end Treasury yields breaking to fresh cycle highs just a few days ago, he prefers not to continue QT if the Fed is cutting rates. It's in contrast to some in the recent minutes of the Jul 26 FOMC meeting which revealed "A number of participants noted that balance sheet runoff need not end when the Committee eventually begins to reduce the target range for the federal funds rate."
• Amidst the recent excitement over r* deliberations, he sees his estimates of r* as not likely having shifted dramatically, i.e. a similar view to NY Fed’s Williams.