Fed's Harker: Data Will Determine Course of Interest Rate Policy
18 January 2020 - 1:52AM
Dow Jones News
By Michael S. Derby
The president of the Philadelphia Federal Reserve Bank, Patrick
Harker, said the U.S. economy is in good shape right now, adding
that how economic data come in will drive what central bank
officials do with interest-rate policy.
"My outlook for the economy is positive, but let me add that my
outlook will continue to be driven by the data as each report is
released throughout 2020," Mr. Harker said in a speech prepared for
delivery before a banking group in New Jersey. He added, "The data
will also determine my view on monetary policy. And policy entails
more than interest rates," in reference to the central bank's
continuing technical challenges controlling money-market interest
rates.
"The data show that the labor market is doing incredibly well,
and I believe the economy is nearing our target inflation rate of
2%," he said.
Mr. Harker will be a voting member of the rate setting Federal
Open Market Committee this year. Officials cut their overnight
target-rate range three times last year as they sought to offset
risks to the outlook posed by slowing global growth and trade
uncertainty.
At their December FOMC meeting, policy makers strongly signaled
they expect rates to hold steady for the year at the current range
of between 1.5% and 1.75%. Officials who have spoken this year have
affirmed that, and in a speech on Wednesday, Mr. Harker joined with
that view and said he believes monetary policy is now in a "good
place" and "I don't think we need to move rates in either
direction" anytime soon.
Mr. Harker repeated in his speech Friday that the Fed still
wants to move to a system where it doesn't have to actively
intervene in money markets to achieve interest rate control, while
observing the central bank is still working out how to get to that
point.
Write to Michael S. Derby at michael.derby@wsj.com
(END) Dow Jones Newswires
January 17, 2020 09:37 ET (14:37 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.