Harker supports Fed’s moving to 25bp rate hikes

Philadelphia Fed’s Patrick Harker, on Wednesday, said that he is willing for the US central bank to move to a slower pace of interest rate hikes as a reaction to some signals that denote how hot inflation is cooling.

“High inflation is a scourge, leading to economic inefficiencies and hurting Americans of limited means disproportionately,” Harker said in prepared remarks for a speech that closely followed remarks from earlier in the month. To get inflation under control, the Fed’s “goal is to slow the economy modestly and to bring demand more in line with supply,” Harker assed.

The US session has attracted a big deal of volatility. The US dollar has been whipsawed on the back of the Bank of Japan’s deliberations and subsequent announcements combined around the weak US data that came in the US session.

Bulls moved into the dollar following hawkish remarks from Fed’s James Bullard that helped to flip sentiment on Wall Street. However, the DXY index W-formation could be a pull on the US Dollar with 102.20 vulnerable of retesting.

Key Quotes

Reiterate support for moving to 25-basis-point interest rate hikes.

Reiterate that the time for supercharging rate hikes is over.

Fed committed to lowering inflation back to 2% target.

Expect Fed to raise rates ‘a few more times’ this year.

Expect inflation to moderate to 3.5% this year.

inflation will fall to fed’s 2% target in 2025.

Expect US economy to grow 1% this year, unlikely to suffer recession.

Expect US unemployment rate to tick up to 4.5% this year before ebbing.