MNI: Fed's Harker Urges Stay The Course On Rates Policy
MNI (WASHINGTON) - The Federal Reserve should stick to its current interest rate policy and allow restrictive rates to keep pressure on prices despite inflation progress slowing over the past several months, Philadelphia Fed President Patrick Harker said Thursday.
"I am of a position that we let monetary policy continue to work," he told a conference at the University of Delaware.
"The policy rate remains restrictive enough to continue putting downward pressure on inflation over the longer term, as we need it to, while not negatively impacting the rest of the economy. And the caution I am taking is to look at all the data and not be moved to act, in either direction, based on one report covering one month."
January's CPI report was surprisingly high but Harker said he believes seasonal adjustments are struggling to keep up with a fast-changing economy. Nine out of the past 10 January reports have been higher than expected, he noted.
Changing policies in Washington and elsewhere around the world could have an impact on inflation dynamics but "this is why we watch the data and then react, if we must," he said. (See: MNI: Fed In Holding Pattern As Inflation To Stay High-Ex-Staff )