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Wilmington, DE — Regarding “the part that everyone really cares about: rates,” Philadelphia Fed President Patrick T. Harker said on Wednesday, “My own view is that we should hold steady for a while and watch how things unfold before taking any more action.”
Harker said that his outlook hasn’t changed much over the past few months and that he continued to see GDP growth of a bit above 2 percent for 2019, returning to trend of about 2 percent in 2020; continued resilience in the labor market; and inflation “edging up” to meet its 2 percent goal “sometime in the next 18 to 24 months.”
“We are riding the wave of the longest economic recovery on record, and that’s a positive,” said Harker, and overall, the economy “is in a good place.”
There are, however, headwinds, he noted, “the strongest being uncertainty. Trade and international developments, including slowing overall global growth, have cast a shadow of ambiguity. And as anyone who’s sat on a corporate board can tell you, in those situations, when the future is murky, you wait to make decisions. And while the consumer has been the hero of this year’s growth story, that can’t be the single engine. We need business investment to drive the economy as well.”
While noting his own preference in policy decisions, Harker said that the difference of opinions on the FOMC was actually a positive, acting as “a good reminder that monetary policy in the United States is a deliberative process. Every region of the country is represented around the table, and policy made by a plurality of views and opinions will necessarily be thoughtful and temperate.”