MNI POLICY: Harker: US Job Mkt Incredibly Strong, CPI On Track

By Jean Yung

     WASHINGTON (MNI) - The U.S. job market is very strong and inflation is on

track to reach the Federal Reserve's 2% target, Philadelphia President Pat

Harker said Friday. 

     "The labor market is doing incredibly well, and I believe the economy is

nearing our target inflation rate of 2 percent," Harker said in remarks prepared

for the New Jersey Bankers Association. 

     Harker is a voter on monetary policy this year, and his speech didn't

directly give an outlook for rates but said his views will be dictated by

incoming data. 

     "My outlook for the economy is positive, but let me add that my outlook

will continue to be driven by the data as each report is released throughout

2020," he said. 

     "Overall, the economy is looking pretty good. We are in the longest

economic expansion on record, and I see growth returning to trend of about 2

percent this year, a view that is widely shared."

     Consumer spending has been driven by "booming" consumer confidence even as

business investment is "lagging" amid uncertainty on fiscal and other policies

and global forces including the global slowdown, trade uncertainty, and

geopolitical tensions, he said.

     "While we haven't quite met our 2 percent inflation target, we're on track

to get there," he said, adding that this is a "purely academic problem" to most

people but important for the Fed as part of its Congressional mandate. 

     Harker also said the Fed's recent policy to ensure ample reserves to smooth

out trading in repo markets "clearly worked" and the Fed is studying solutions

for the future. "Going forward, the Committee remains committed to implementing

monetary policy in a regime of ample reserves, which, again, does not require

active management of the supply of reserves."

--MNI Washington Bureau; +1 202-371-2121; email: jean.yung@marketnews.com

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