The Federal Reserve won’t meet to discuss interest rates until September, but officials have been talking about what their next move could be.
Philadelphia Fed President Patrick Harker said in a speech Tuesday that the central bank could be near a point where it can hold rates steady.
Harker, a voting member of the policy committee this year, said absent any alarming new data between now and the September meeting, the Fed could be at the point where it can “be patient” and let the actions it has already taken do their work.
He told an audience at an event organized by the Philadelphia Business Journal that if they are at that point, they’d have to keep rates there for a while, and there isn’t any likely circumstance that could call for an immediate easing.
Harker said he expects core PCE inflation to dwindle to just below 4% on an annual basis by the end of 2023, before falling below 3% next year and leveling out at the 2% target rate in 2025. Consumer price index data for July is due out Thursday.
Richmond Fed President Thomas Barkin, speaking elsewhere on Tuesday, said it’s too soon to say whether a September rate increase is appropriate. He told reporters that with two job and two inflation reports between now and the meeting, “I don’t see any reason to pre-judge.”
New York Fed President John Williams told the New York Times they’re close to what a peak rate would be. Indicators say the economy is strong, but he expects “we will need to keep a restrictive stance for some time.” It depends on the data, he said.
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