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Philadelphia — Patrick T. Harker, president and CEO of the Federal Reserve Bank of Philadelphia, told a virtual audience at the Prosperity Caucus in Washington, D.C., that “it will soon be time to begin slowly and methodically … taper our $120 billion in monthly purchases of Treasury bills and mortgage-backed securities.” Harker said those purchases were necessary during the acute phrase of the COVID-19 crisis but are no longer effective as a tool for supporting the economy.

“To the extent that we are still dealing with a labor force issue, the problem lies on the supply side, not with demand,” Harker said, observing that “the U.S. economy has created many millions of jobs in recent months — we just can’t fill them.” He added that any action on raising the federal funds rate would wait until after the completion of tapering asset purchases.