(Finance) – “I remain convinced that we are at the point where keeping the official rate stable is the prudent position to take“. He said it Patrick Harkerpresident of the Federal Reserve Bank of Philadelphia, during a Risk Management Association event in the city.
“The economic and financial conditions continue to evolve as I expected, although I am keeping an eye on the most recent data – he explained – There was no abrupt change in the data which would lead me to change my current position.”
Harker made three points: “First and foremost we will not tolerate a new acceleration in prices. Second, while I am prepared to revise my views and act accordingly if I see signs of re-inflation, I have no intention of overreacting to normal month-to-month data variability. And third, we need to remain data dependent, and that means making sure we separate what might just be noise from what might be a real signal.”
The Fed official also pointed out that the speed with which the central bank has raised rates is part of the case for stability now. “Official rates are restrictive and keeping them stable now will keep us in restrictive territory and will steadily reduce inflation,” he said. “This is a time when doing nothing is doing something and, in fact, I would say it’s doing a lot.”
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