(Finance) – Economic growth and employment are robust, but “inflation is too high and I am very worried about it“He said it Patrick Harkerchairman of the Philadelphia Federal Reserve, becoming the latest US central bank official to report an excessive rise in consumer prices and the need for rapid interest rate hikes to buffer the situation.
“The generous fiscal policies, supply chain disruptions and accommodative monetary policy have pushed inflation much higher than my FOMC colleagues and I are comfortable with. I am also concerned that inflation expectations may break loose, ”she said in a speech to the Delaware State Chamber of Commerce.
These concerns are what prompted the Fed to raise the federal funds rate last month for the first time since 2018. “We raised our target by 25 basis points and I expect a series of deliberate and methodical increases as the year continues and the data evolves. I also anticipate that we will soon begin to reduce our holdings in Treasury, agency debt and mortgage-backed securities, Harker pointed out.
“With the outflow of pandemic support, tightening monetary conditions and the war in Ukraine putting pressure on commodity prices, I think growth will moderate this year – added the president of the Philadelphia Fed – We can probably expect GDP growth from 3% to 3.5% this year, before falling to a trend growth from 2% to 2.5% in the next two years “.