fed harker: will raise interest rates three times this year, economic growth may reach 2%

on wednesday, beijing time (february 22), philadelphia fed chairman and 2017 fomc voting member patrick harker gave a speech on the economic outlook.

harker said that he expects the federal reserve to raise interest rates three times in 2017. gradual interest rate increases are a prudent move; the three expected rate increases have nothing to do with fiscal policy.

harkersaidthatthefedhasnotyetmadeadecisiononthe”newnormal”ofitsbalancesheetandhasnotyetdecidedwhentoshrinkitsbalancesheet.

huckbelievesthatconsumptiongrowthwillbestrongerin2017,pushingtheeconomicgrowthto2%.

healsosaidthatthelabormarkethasreturnedtoamoreorlessfullyhealthystate,butthereisstillroomforfurtherwageincreases;duetothetighteningofthelabormarket,signsofinflationarebeginningtoappear,andthereisariskofinflationovershooting;itisexpectedthatpersonalconsumerspendingandinflationareexpectedtoreach2%thisyearornext.

healsosaidthatheisdeeplyconcernedaboutthethreatstothefed’spolicyindependence,butthatthefedcancommunicatebetter;hedoesnotbelievethatthefedandforeigncentralbankswillbeinastateofpolicydifferentiationforalongtime;thelevelofstudentdebtintheunitedstatesisveryseriousproblem.

(original title: fed harker: expected to raise interest rates three times this year, economic growth may reach 2%)

(editor: df318)