• Philly Fed’s Harker (’23 voter) sees rates ‘well above’ 4% by year-end and to keep hiking ‘for a while’.
  • It will stop sometime in 2023 and should then hold at a restrictive rate for a while to let monetary policy do its work. They can always tighten further if data dictates, but they need to let the system have time to work itself out.
  • Sees PCE inflation come in at around 6% in 2022, around 4% next year, and 2.5% in 2024.
  • The prospects of hiking further after a pause helps front end Tsy yields nudge higher, keeping +1.3bp on the day at 4.569% but still well within the day’s range off fresh post-2007 highs of 4.61%.

Harker: Can Tighten Further After Pause If Necessary

Last updated at:Oct-20 16:18By: Chris Harrison
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  • Philly Fed’s Harker (’23 voter) sees rates ‘well above’ 4% by year-end and to keep hiking ‘for a while’.
  • It will stop sometime in 2023 and should then hold at a restrictive rate for a while to let monetary policy do its work. They can always tighten further if data dictates, but they need to let the system have time to work itself out.
  • Sees PCE inflation come in at around 6% in 2022, around 4% next year, and 2.5% in 2024.
  • The prospects of hiking further after a pause helps front end Tsy yields nudge higher, keeping +1.3bp on the day at 4.569% but still well within the day’s range off fresh post-2007 highs of 4.61%.

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