Fed's Harker: Keep Policy Rate on Hold Amid Uncertainty

Federal Reserve Bank of Philadelphia President Patrick Harker expressed support for maintaining the current policy interest rate at 4.25 to 4.5 percent, as reported by Reuters. In a speech delivered on Monday, Harker emphasized the importance of remaining data-dependent and monitoring the economic outlook to make informed decisions about future policy rate adjustments. He acknowledged the uncertainty surrounding new government policies and the need to balance the risks of acting too aggressively or too conservatively with monetary policy.

Harker's assessment of the labor market and inflation trends played a significant role in his decision to support the Fed's decision to hold the policy rate steady. He noted that the labor market has largely returned to balance, with hiring continuing at a decent clip, and that the unemployment rate remains low. However, he also recognized that inflation has remained elevated and somewhat sticky over the past several months, both in the overall and core figures.

Given these factors, Harker emphasized the importance of letting monetary policy do its work and letting the data roll in. He suggested that the Fed should continue to monitor the implications of incoming information for the economic outlook and be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee's goals.



In conclusion, Harker's support for keeping the policy rate on hold reflects his balanced approach to monetary policy, which aims to foster economic growth and stability while addressing inflation concerns. By remaining data-dependent and attentive to risks, the Fed can better navigate the uncertain economic outlook and support maximum employment and returning inflation to its 2 percent objective.