Harker says that the Fed is making progress on inflation. Earlier this week, Harker said that he thought it might be time that the Fed can hold rates steady.
Other thoughts from earlier this year:
- Rate Cuts: Harker anticipates that rate cuts might begin sometime next year.
- Current Stance on Rates: He believes that the Federal Reserve might be at a juncture where they can maintain the current interest rates without changes.
- Data Dependency: Unless there's any 'alarming' new data by mid-September, the stance would be to be patient and keep rates steady.
- Duration of Steady Rates: If the decision is to hold rates steady, this position will likely be maintained for an extended period.
- Policy Easing: Harker doesn't anticipate any immediate consequences from easing the policy rate.
- Inflation: The latest PCE report indicated ongoing disinflation. He predicts the core PCE to drop slightly below 4% by the end of the year, below 3% in 2024, and reach the target in 2025.
- Unemployment: He expects a minor increase in unemployment rates.
- Economic Outlook: Harker foresees only a modest economic slowdown and believes the economy is on track for a 'soft landing' that many hope for.
- Other Concerns: He is closely monitoring the resumption of Federal student loan repayments starting October 1.
- Key Takeaway: "Absent any alarming new data between now and mid-September, we may be at the point where we can be patient and hold rates steady and let the monetary policy actions we have taken do their work.”
