Philly's Harker: Recovery Path Depends On Fiscal Support

Philadelphia Fed President Patrick Harker (2020 FOMC voter) makes his first public comments since the September FOMC, speaking on "The Economy, the Pandemic, and Machine Learning":

• In prepared remarks, he says that while "for now, I expect this recovery to continue, though not fast enough that, by the end of this year, GDP will have returned to where it was before the pandemic struck", while employment "probably won't be back to pre-pandemic levels until 2023".
• He notes that this growth scenario depends on "only sporadic new outbreaks" of COVID, and assumes a vaccine becomes "widely available sometime mid to late next year".
• His speech also urges "lawmakers to consider providing additional support soon" - and in post-meeting Q&A he clarified that his forecast includes another $1trn in stimulus spending without which GDP would be several tenths of a percent weaker.
• Also in Q&A, he notes that the Fed's policy response will depend on both the level of inflation and its pace - echoing comments he made in August when he said while he'd be comfortable with inflation as high as 2.5-3%, it's "whether it's reaching 2%, creeping up to 2.5% or shooting past 2.5%."