MNI BRIEF: Fed's Harker Says May Rate Cut Possible
Philly Fed chief says won't take May cut off the table but not his baseline.
Federal Reserve Bank of Philadelphia President Pat Harker said Thursday it is possible it could just take a couple more months of data before he supports easing interest rate, adding that a rate cut in May is possible but more likely to come later.
"I'm not looking for a lot more evidence. I just want to get a couple more months under our belt, at least [data for the month of] March," he said. "In my view, I don't see why we would do anything in March." Asked about cutting rates in May, he said: "It's possible. I wouldn't take it off the table, for sure." (See: MNI INTERVIEW: Fed Could Cut As Early As June - Quarles)
"If PCE inflation starts to come in cooler than we think, and the labor market starts to signal even more that it is cooling more than we think right now, then I wouldn't take it off the table," he said about a May rate cut, in Q&A at a University of Delaware event. "It's not my forecast right now but I wouldn't say no." Once the rate-cut process begins, Harker suggested support for a steady, slow easing, maybe at every other FOMC meeting and starting in the second half of the year, depending on incoming data. "We are close to cutting. Just give us a couple meetings."