02/10/2023
Philadelphia Fed President Patrick Harker said on Friday that the Federal Reserve needs to get its policy rate above 5% interest rate and then pause.
A so-called economic "soft landing" is "more probable now" if inflation keeps easing, he said. His base case still doesn't see a recession this year, he said during an interview on Wharton Business Radio.
At this point, he's not concerned that wage issues will drive inflation. Still, labor market structural issues need to be addressed, but that's outside of the Federal Reserve's mandate, Harker said.
In late January, Harker had said he expected the federal funds rate target range to rise to slightly above 5%. He also said he expected real GDP growth of about 1% this year and core inflation to fall to ~3.5% by the end of 2023.
