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Fed Harker Says Fed Action Against Inflation Needed

Fed’s Harker says he’s not worried central bank is lagging behind inflation but action is needed

  • says Fed should think about balance sheet normalization after interest rates are sufficiently above zero
  • says the first trimester is going to be tough
  • says Fed needs to be more proactive on inflation
  • says he’s planning three rate hikes for 2022, but four hikes aren’t out of the question
  • Harker says if the Fed is to adjust monetary policy, it can use its main tool, the federal funds rate
  • says the US economy has reached its maximum employment tenure in its mind
  • says Fed can’t affect supply issues through monetary policy
  • Says US Economy Solves Supply Chain Problems
  • says there are many reasons that cause labor supply problems

Headlines via Reuters

That first translated comment is that we dropped the ball, but maybe in the future we will take it back. The rest repeat, once again, what we have already heard from other Fed officials since they let go of the laughable “transitional” mirage of their language. The Fed will meet on January 25-26, and officials who set a date for the action have not named that meeting but rather the March meeting.

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