Harker Turns More Hawkish

Philadelphia Fed President Harker (’23 voter) is the latest Fed official to provide a more hawkish tone in his latest round of comments.

• Harker told the FT: “I currently have three increases in for this year, and I’d be very open to starting in March. I’d be open to more if that’s required.”
• He described the December CPI print as “very high, very bad.”
• He went on to note: “We don’t want to put the brakes on completely, but we do need to slow down some of the demand. We can do something… by raising the fed funds rate.” Harker did also note that he could also support fewer rate increases if “inflation does in fact start to come down.”
• “Ultimately, what we worry about is that people start to think, ‘Well, inflation is just not going to be at 2 per cent, it’s going to be at 2.5 per cent or 3 per cent going forward.’”
• Harker said the Fed could begin the “run-off process” once interest rates were “sufficiently away” from 0%, noting that he is “very much in the camp of communicating over and over how we’re going to do this and then being methodical.”
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