On Wednesday, Beijing time (February 22), Philadelphia Fed Chairman and 2017 FOMC voting member Patrick Harker gave a speech on the economic outlook.
Harker said that he expects the Federal Reserve to raise interest rates three times in 2017. Gradual interest rate increases are a prudent move; the three expected rate increases have nothing to do with fiscal policy.
HarkersaidthattheFedhasnotyetmadeadecisiononthe”newnormal”ofitsbalancesheetandhasnotyetdecidedwhentoshrinkitsbalancesheet.
Huckbelievesthatconsumptiongrowthwillbestrongerin2017,pushingtheeconomicgrowthto2%.
Healsosaidthatthelabormarkethasreturnedtoamoreorlessfullyhealthystate,butthereisstillroomforfurtherwageincreases;duetothetighteningofthelabormarket,signsofinflationarebeginningtoappear,andthereisariskofinflationovershooting;itisexpectedthatpersonalConsumerspendingandinflationareexpectedtoreach2%thisyearornext.
HealsosaidthatheisdeeplyconcernedaboutthethreatstotheFed’spolicyindependence,butthattheFedcancommunicatebetter;hedoesnotbelievethattheFedandforeigncentralbankswillbeinastateofpolicydifferentiationforalongtime;thelevelofstudentdebtintheUnitedStatesisVeryseriousproblem.
(Original title: Fed Harker: Expected to raise interest rates three times this year, economic growth may reach 2%)
(Editor: DF318)
