The head of Federal Reserve Bank of Philadelphia Patrick Harker, stated on Wednesday that he supports slowing the pace of Fed asset-buying but does not expect a short-term rate hike.
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In a text of his speech, Mr. Harker stated that he is in the camp that believes it will soon be time to start slowly and methodically tapering our $120 billion in monthly purchases of Treasury bills and mortgage-backed securities.
Mr. Hacker further noted that after tapering the asset purchases, the Fed could start to think about raising the federal-funds rate. He does not expect any hikes to interest until late next year or early 2023.
Mr. Harker is not a voting member of the Federal Open Market Committee responsible for setting rates. He insisted on his view that Fed bond buying is not doing much to lift the US economy.
Mr. Hacker also forecasted a 6.5% growth in the gross domestic product this year and a 3.5% gain next year. He stated that high levels of inflation are starting to soften and likely drop to nearly over 2% in 2021.