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MNI BRIEF: Fed’s Harker- Markets Need Time To Respond To Hikes

(MNI) WASHINGTON

The Federal Reserve needs to raise interest rates to more neutral levels fast but not so fast that it disrupts markets’ ability to respond, Philadelphia Fed President Patrick Harker said Wednesday.

“I want to get to neutral ... as expeditiously as possible but not so quickly that we distort markets and we can’t let the markets respond appropriately,” he said.

Former Fed staff have told MNI the Fed is likely to test the neutral level of the funds rate from below given caution about what exactly constitutes restrictive policy – and the lag in the effects of monetary tightening.

MNI Washington Bureau | +1 202 371 2121 | pedro.dacosta@marketnews.com
MNI Washington Bureau | +1 202 371 2121 | pedro.dacosta@marketnews.com

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