Fed’s Harker
Fed’s Harker, president of the Philadelphia Fed, in a speech to the Mortgage Bankers Association said:
- Current interest rate environment draining housing market of new buyers
- Reiterates US central bank very likely done with rate hikes
- Acknowledges the impact of recent Federal Reserve actions on the mortgage climate.
- Highlights the Federal Reserve’s commitment to price stability and the goal of returning inflation to a 2 percent annual target.
- Discusses the impact of rising mortgage rates on housing market dynamics, including decreased inventory and elevated prices.
- Notes the growth in new home sales but acknowledges the overall slowdown in the housing sector.
- Mentioned his expectation of steady disinflation and a return to the 2 percent inflation target.
- Acknowledges challenges in assessing trends in disinflation, such as monthly variability in prices.
- Advocates a steady policy rate to press down on inflation and mentions outside factors influencing the economy.
- Expects GDP growth to continue, with no anticipation of a recession.
- Anticipates a slight increase in the unemployment rate but does not foresee mass layoffs.
- Acknowledges various factors influencing the unemployment rate, such as labor force participation.
- Emphasizes the need to balance both hard and soft data in making policy decisions.
- Suggests that while the economy has faced significant challenges, fundamental changes have not occurred since 2018 or 2019.
- Recognizes the resilience of the economy and the need to consider new data and viewpoints.
- Believes a patient approach to monetary policy will lead to a soft landing and stable economic growth.
Harker is a voting member in 2023.
The comments from Harker are the first from a number of Fed officials this week including the Fed chair Powell who will speak on Thursday to the Economic Club of New York.
Below is the current schedule of those Fed speakers. After this week, the Fed will be in the blackout period before their November 1 interest-rate decision.
Federal Reserve speakers this week