Fed Harker "Very Concerned About Inflation... Continuous Interest Rate Hikes Expected"

[Asia Economy New York=Special Correspondent Joselgina] "Inflation is too high, and I am very concerned about this."

Patrick Harker, President of the Federal Reserve Bank of Philadelphia, emphasized the need for consecutive interest rate hikes to control inflation on the 6th (local time), joining the Federal Reserve's (Fed) hawkish remarks. This statement came just one day after Lael Brainard, nominee for Vice Chair, and Esther George, President of the Kansas City Fed, expressed concerns about inflation.

According to economic media CNBC and others, President Harker said in a speech at the Delaware Chamber of Commerce event that "inflation is progressing at a very high level, and I am very concerned about it." He noted that Russia's invasion of Ukraine has increased inflationary pressures by raising prices not only for oil and gas but also for other raw materials such as wheat and fertilizer.

He stated, "Generous fiscal policies, supply chain disruptions, and monetary easing policies have pushed inflation much higher than my colleagues and I are comfortable with," adding, "I am also worried that the leash on inflation expectations may loosen and become unstable."

President Harker predicted, "There will be consecutive planned and systematic interest rate hikes." This is similar to the remarks made by Fed officials, including nominee Brainard, the previous day, who mentioned the need for stronger and faster rate hikes and balance sheet reduction. However, regarding balance sheet reduction, he only said, "We will start to reduce assets."

CNBC reported, "His remarks were very similar to Brainard's views on interest rate hikes," but added, "(President Harker) did not emphasize the issue of balance sheet reduction much."

Although President Harker does not have voting rights on the Federal Open Market Committee (FOMC), he is exercising voting rights until June in place of the vacant Boston Fed President position.

Immediately after President Harker's remarks became known, the stock market plunged and bond yields surged. The 10-year yield is currently at 2.596%. At 2 p.m. Eastern Time, the minutes of the March FOMC meeting will be released.

This content was produced with the assistance of AI translation services.