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Fed’s Harker says expects ‘methodical’ rate hikes to fight ‘too high inflation’ -Breaking

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© Reuters. FILE PHOTO – The Federal Reserve Building in Washington, U.S.A, January 26, 2022. REUTERS/Joshua Roberts

(Reuters) – Patrick Harker, President of the Philadelphia Federal Reserve, reiterated Thursday his belief that the U.S. central banks will make “a series deliberate and methodical increases” in interest rates to lower widespread inflation.

Harker spoke at Rider University in Lawrence Township in New Jersey. He said that while the Fed is unable to address the rising inflation rate, it can affect the demand.

In his speech, Harker reiterated recent views regarding the outlook and the impact of tighter monetary policy. He said that this will reduce economic growth to 3.5% next year and 2.5% to 2.5% over the next two years.

He said that inflation should also “begin to taper” in this year. It will end 2022 around 4%, and then fall to the Fed’s target of 2% over the next few years.

Fed policymakers began raising rates last month with a quarter-of-a-percentage point increase, and are expected to accelerate their pace of policy tightening when they next meet in May.

Futures traders in interest rates expect that the Fed will raise its rate by half-point at the next three meetings, before returning to quarter point hikes for the final three meetings.

This would increase the Fed’s policy rates, currently in the range of 0.2% to 0.5%, to 2.5% to 2.55% at the end of this year.

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