Toeing the line set forth in the Summary of Economic Projections, Federal Reserve Bank of Philadelphia President Patrick T. Harker said Friday he expects three rate hikes this year.
"I see three modest hikes as appropriate for the coming year, assuming the economy stays on track," Harker told the New Jersey Bankers Association, according to prepared text released by the Fed. "Fed policymakers enjoy saying we're data-dependent and this is an area where that rings especially true."
"I've said it before, and it's worth repeating, that monetary policy is a fairly limited set of tools with a fairly limited reach," he said. "We will respond to changes in the economy with moves in the federal funds rate, and we can do a very good job of creating the conditions that are consistent with economic growth. But the kinds of policies that will deliver that growth — employment programs, development, taxation, and trade policies — are up to elected officials at the local, state, and national levels."
The labor market is strong although "[t]he drop in labor force participation must be addressed, but that will take legislative action," and inflation is rising toward the Fed's 2% goal, while "growth is solid," he said.
