Philly Fed President Unconvincing As He “Lightly” Pencils In December Hike

Speaking in at a conference in Tokyo, the head of the Philly Fed, Patrick Harker said that he has penciled in a further rate hike by the Fed at its December meeting on 12-13 December 2017. However, his use of the word ‘lightly’ suggested that there may be a degree of wavering on his part. According to Reuters.
A Federal Reserve official said on Monday he expects to back an interest rate hike next month despite caution over low-inflation, as U. S. central bank policy needs to be positioned to deal with future economic shocks.
Philadelphia Fed President Patrick Harker said he has ‘lightly penciled in’ a December rate hike. However, he flagged he had slightly less conviction about the policy decision than he had last month as he ‘continues to elicit caution’ about weak inflation and also about the way in which it is measured. Harker said he expects the Fed to raise rates three times next year as long as inflation remains on track, and the projected tightening could take policy to what he would describe as a neutral stance. Harker, a centrist voter on the Fed’s monetary policy committee this year under an internal rotation, said the Fed must continue normalizing policy as the economy is ‘more or less at full strength’ and there remains ‘very little slack’ in the labor market. ‘Removing accommodation is the right next step for a few reasons,’ he said in prepared remarks to a Global Interdependence Center conference in Tokyo…

This post was published at Zero Hedge on Nov 13, 2017.


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