https://www.oann.com/feds-harker-says-interest-rate-hikes-to-be-deliberate-methodical/?utm_source=rss&utm_medium=rss&utm_campaign=feds-harker-says-interest-rate-hikes-to-be-deliberate-methodical

FILE PHOTO: The Federal Reserve building is seen before the Federal Reserve board is expected to signal plans to raise interest rates in March as it focuses on fighting inflation in Washington, U.S., January 26, 2022. REUTERS/Joshua Roberts

March 29, 2022

(Reuters) – The U.S. central bank will likely approve “a series of deliberate, methodical” interest rate increases this year, Philadelphia Federal Reserve President Patrick Harker said on Tuesday.

Inflation is “far higher than … we are comfortable with,” Harker said in comments prepared for delivery to the Center for Financial Stability in New York. “I expect a series of deliberate, methodical hikes as the year continues,” in an effort to reduce inflation over the next couple of years from the current 6% level to the Fed’s 2% target.

The Fed approved a quarter-percentage-point increase in its benchmark overnight interest rate on March 16, with policymakers projecting they would approve further increases in borrowing costs at the central bank’s six remaining meetings this year.

Since then, officials including Fed Chair Jerome Powell have indicated they may lean even harder on the economy with some half-percentage-point hikes, perhaps as soon as the May 3-4 policy meeting.

Harker did not say explicitly in his prepared remarks whether he feels those larger increases will be appropriate, or how high the Fed’s policy rate should be increased by the end of this year.

He did say that some of the problems driving high inflation may have begun to ease on their own, a potentially welcome development for the Fed that would argue against a fast push higher in rates.

“There are some signs in the data, and in what we hear from our contacts, that supply chain constraints are finally easing,” Harker said.

The war in Ukraine and new coronavirus restrictions in China have raised the risk of prolonged global supply chain trouble.

The bulk of Harker’s comments were devoted to a review of COVID-19 pandemic developments in the housing and money markets.

(Reporting by Howard Schneider; Editing by Paul Simao)

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