Philadelphia Federal Reserve President Patrick Harker joined a group of central bank policymakers who warned of high inflation and at the same time he also agreed that interest rates need to be raised to control price increases.
In a recent statement, policymaker Harker stated that he was concerned about the inflation rate growing to its highest level in 40 years. He expects the Fed to respond by raising rates and reducing bond holdings.
Harker told the Delaware State Chamber of Commerce that inflation is growing rapidly and this is very disturbing. He added that loose monetary policy, high fiscal financing and supply chain disruptions have driven inflation to rise further. This can bring the probability that inflation to an uncontrollable state.
The warning statement was issued a day after Governor Lael Brainard and San Francisco Fed President Mary Daly also expressed concern over inflation. Harker’s comments are seen to be very similar to Brainard’s view of interest rate hikes.
He expects "a series of gradual increases this year". At its March meeting, the FOMC approved its first rate hike in more than three years. The market expects a consecutive increase of up to 3% this year.
The market is now focused on the FOMC meeting at 2 p.m.