Fed’s Harker Sees 3 Rate Hikes in 2017

The U.S. economy is gathering enough strength to warrant three interest rate increases this year from the Federal Reserve, Philadelphia Fed President Patrick Harker said on Thursday.

“The economy is displaying considerable strength,” Harker said in prepared remarks for a business group in Malvern, Pennsylvania, adding that inflation is accelerating and will hit the U.S. central bank’s 2 per cent target in 2017 or 2018.

“I see three modest hikes as appropriate for the coming year, assuming the economy stays on track,” said Harker.

It was Harker’s first speech of 2017, a year in which he will have a vote on the Fed’s interest rate policy decisions.

His view on the path for rates appears in line with that of other Fed officials. The Fed said last month when it raised rates by a quarter percentage point that the median forecast of its 17 policy makers was for three further rate increases this year.

Harker said the U.S. labor market was “more or less at full health,” although he said he was concerned by the long-term decline in the share of the population that either has a job or is looking for one.

via Globe and Mail

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Alfonso Esparza

Alfonso Esparza

Senior Currency Analyst at Market Pulse
Alfonso Esparza specializes in macro forex strategies for North American and major currency pairs. Upon joining OANDA in 2007, Alfonso Esparza established the MarketPulseFX blog and he has since written extensively about central banks and global economic and political trends. Alfonso has also worked as a professional currency trader focused on North America and emerging markets. He has been published by The MarketWatch, Reuters, the Wall Street Journal and The Globe and Mail, and he also appears regularly as a guest commentator on networks including Bloomberg and BNN. He holds a finance degree from the Monterrey Institute of Technology and Higher Education (ITESM) and an MBA with a specialization on financial engineering and marketing from the University of Toronto.
Alfonso Esparza