MNI BRIEF: Fed's Harker Sees Weak 1Q, Strong Bounce in 2H

Federal Reserve Bank of Philadelphia President Patrick Harker warned Thursday that the economy could shrink in the first three months of the year before reversing into a strong rebound in the second half and into 2022 as Covid vaccinations become widely available.

"I'm expecting the fourth quarter of last year to show modest growth, before a significant slowing in the first quarter of this year -- possibly even negative growth," he said in remarks prepared for a Philadelphia business event. "I am optimistic that in the second half of 2021, the economy -- and frankly, life -- should begin to look much more normal. GDP growth should be strong in the second half of the year, and through 2022, before a light tapering in 2023."

A bank survey of consumers found fewer job losses during the winter resurgence of Covid cases, but more income declines and concerns over their financial situation, he said. The recent USD900 billion fiscal package should "help buoy the economy," he said. He did not make any comments on monetary policy.