Speaking at FintechHe adds:
- The GDP is running slightly above the trend
- The labour markets of feel really tight
- Best estimate, the GDP decrease of 100 bp of the quarter
- The GDP will bounce back from the hurricanes in 4Q
- We begin to see some wage pressures
- The low growth of wages, may be due to changes in who is employed,
- We are running below our 2% inflation target
- Inflation is one area that gives me pause
- To the average American, low inflation is not a problem, but there are risks for monetary policy.
- Our work showing that we are to overestimate the inflation is convincing
- Pause on the Fed funds rate path is appropriate
- Today PCS of printing is low
- Penciled up in December and 3 tightenings in 2018
- B/S relax is to take several years
- The Fed may end up with B/S of $2.5 T. will right size when you see it.
- My estimates of the rate of assumed inflation will return
Fed Harker is the President of the Philadelphia Fed. He is a member with the right to vote in 2017 (not 2018). His pencil was probably an eraser, but at this point, a Dec of the hike is expected.
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