© Reuters Fed’s Harker: Better to pause rate hikes at the right time than risk excessive tightening
November 16 news from the Associated Finance Press (Editor Niu Zhanlin)Eastern Time on Tuesday (Nov. 15), Philadelphia Fed Chairman Harker said the Fed should slow the pace of interest rate hikes as monetary policy gets closer to tight enough and rates interest rates will be at a tighter level sometime next year The interest level remains unchanged to play the role of monetary policy.
“Given the austerity measures we’ve already implemented, I expect a slower pace of rate hikes in the coming months as the policy rate approaches a tight enough level,” Harker said at a conference in Philadelphia.
His relatively dovish views have added momentum to the market. The three major US stock indexes rallied across the board on Tuesday. As of press time, the Dow was up 0.94%, the Nasdaq was up 2.23% and the S&P 500 was up 1.46%.
Harker reiterated his earlier view: “As long as we have a sustained and meaningful push to bring inflation back down, I think we can hold off interest rate hikes if necessary. From a policy perspective, rather than risk excessive tightening, it’s best to pause when the time comes.” interest.”
On November 2, the Federal Reserve raised interest rates for the fourth consecutive time by 75 basis points to curb the highest level of inflation in 40 years. At the same time, several Fed officials have begun signaling that the time to slow rate hikes is approaching, though they also stress that this does not mean the end of rate hikes.
Federal Reserve Vice Chairman Brainard also issued a similar signal on Monday, noting, “It is appropriate to slow the pace of short-term interest rate hikes. But I think what really needs to be emphasized is that the Fed has done a lot of work , but there are other things waiting to be done.
Investors are now expecting the Fed to hike interest rates by 50 basis points at its December policy meeting following weaker-than-expected CPI and PPI data, fueling hopes that price pressures are starting to ease.
On the other hand, interest rate hikes have yet to cool the hot US job market. The US added 261,000 nonfarm jobs in October, while the unemployment rate remained low at 3.7%, helping to bolster consumer confidence and spending.
Harker pointed out that there are signs that the US economy is starting to slow down and that while the job market remains warm, consumer spending and real estate investment have weakened significantly.
