2017 March Fed rate hike is eyed by the Philadelphia Fed President, Patrick Harker. However, he believes more clarity is needed in relation to Trump policies.
7 February, AtoZForex – The President of Philadelphia Federal Reserve Bank (Fed) Patrick Harker has stated that he would be open to hiking the rates once again at the central bank’s March meeting.
Fed Harker sees possibility of 2017 March Fed rate hike
In December 2016, the Federal Reserve decided to raise the borrowing costs across the US by 0.25 percent from 0.50 to 0.75 percent. Philadelphia Fed President, Patrick Harker, has signaled he is ready for the March rate hike. Mr. Harker has stated:
“I still am supportive of three rate hikes this year, of course with a major caveat, depending on how the economy evolves and policy, fiscal policy, evolves. I think March should be considered as a potential for another 25-basis point increase.”
Last rate increase came as the only second rate hike since the financial crisis on 2008. Moreover, that time, Fed policymakers agreed that it would be appropriate to have three rate hikes throughout 2017. However, markets are seeing only two increases in the interest rates during the current year, with the first hike taking place in June.
Mr. Harker has one of 10 votes this year on the Fed’s rate-setting panel. Patrick Harter stated that in order to back the rate hike he would like to see further US economy growth. Moreover, he highlighted that the strengthening of the labor market is important. He has added:
” not just in terms of the job numbers but also seeing continued wage growth and income growth because that will ultimately feed into inflation.”
The employers across the US have added more jobs during last month than the markets were expecting. However, the hourly wages reading came only three cents higher in comparison to the previous figures. This implies that there is still room for improvement before there is much upward pressure on prices. Mr. Harker has added:
“I don’t think we are behind the curve now. I want to make sure we don’t get behind the curve.”
Harker on Trump’s policies
Moreover, Mr. Harker has appeared cautious, when asked about the potential impact of Donald Trump’s policies on the US economy. He has stated that more details are required in relation to the new agenda of the acting President of the US. As a fact, the Republican President has planned corporate and personal tax cuts and the increase in the infrastructure spending.
While Mr. Harker has stated that broadly immigration could spur economic growth, he made no specific comments about the recent travel ban by Donald Trump. Additionally, being asked about Trump’s plans to ease the regulation across the US, Philadelphia Fed President stated the legislation has contributed to the US financial stability. He has also urged thoughtfulness while deciding on the reforms.
In addition, he has also stressed the significance of the protection against cyber attacks. He stated that now it is the key priority of small banks in the US.
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