Federal Reserve Bank of Philadelphia leader Patrick Harker said Thursday that while the central bank needs to raise rates more to cool off inflation, it can probably do so at a much slower pace compared to the action of last year.
“I expect that we will raise rates a few more times this year, though, to my mind, the days of us raising them 75 basis points at a time have surely passed,” Harker said in a speech to a local group in Malvern, Pa. “In my view, hikes of 25 basis points will be appropriate going forward.”
Harker will be a voting member of the rate-setting Federal Open Market Committee this year. In 2022, the Fed raised rates at a historically aggressive pace and lifted its target rate from near zero levels in the spring to between 4.25% and 4.5% at the December meeting. “I’ve been in the camp that we need to get rates above 5%,” Harker said after his formal remarks, adding “I don’t think we need go much further than 5%" on the federal funds rate.
“What’s encouraging is that even as we are raising rates, and seeing some signs that inflation is cooling, the national economy remains relatively healthy overall,” Harker said.
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