Philadelphia Fed Chairman Patrick Harker said on Thursday that despite slightly faster than expected economic growth, the Fed should still maintain interest rates unchanged.
We are at a stage where we can maintain interest rates at the current level, "Huck said in a speech to the Chartered Institute of Financial Analysts. So far, the evolution of the economic and financial situation has roughly met my expectations, but I am closely monitoring the latest data, which is slightly stronger than my benchmark forecast
He specifically mentioned strong consumer spending, calling it "a bit of a headache". He stated that although his contacts in the retail industry reported that consumers have become more cautious, data from the government shows that households are not stingy with spending.
On Tuesday, data released by the US Department of Commerce showed that retail sales were very hot in September. The retail sales in the United States in September were $704.9 billion, an increase of 0.7% from the previous month, higher than the market's expected growth of 0.3%. The August data also showed a revised up of 0.8% growth, indicating that consumer demand remains resilient.
Huck listed various risks facing the economic outlook, from student loan recovery payments and commercial real estate difficulties to rising bond yields and Middle Eastern conflicts.
Overall, I believe that the current situation indicates that allowing policy interest rates to remain stable is a cautious stance, "he said. A firm and patient monetary policy stance will enable us to achieve the economic soft landing that we all hope for
However, in the Q&A session after the speech, Huck stated that he hopes to place a "triple bet" on the idea that interest rates will remain high for a period of time to help inflation fall to the Federal Reserve's target of 2%. We are achieving our inflation target, but we have not yet achieved it, "Huck said.
On Tuesday, Huck stated that the Federal Reserve should extend the pause in rate hikes and determine whether the rapid rate hikes of the past 20 months have been sufficient to curb inflation.
Huck had the right to vote at this year's FOMC meeting, and as decision-makers considered the next steps, as a voting committee member, his statement was quite significant.
Several officials tend to remain silent
The last time the Federal Reserve raised interest rates was in July, raising the target range for the federal funds rate to 5.25% -5.5%, a 22-year high. At the September meeting, the Federal Reserve stood still. Recently, several Federal Reserve officials have expressed their hope to maintain interest rates unchanged at the next meeting.
On Thursday, Federal Reserve Chairman Powell delivered an important speech at the New York Economic Club.
His series of comments indicate that the Federal Reserve will once again remain silent at its next meeting, but at the same time indicate that if policymakers see further signs of strong economic growth, they may raise interest rates again.
Federal Reserve Governor Waller stated on Wednesday that before making an interest rate decision, the Federal Reserve can wait, observe, and wait, as well as collect more economic data. This indicates that he also supports temporarily maintaining interest rates unchanged in the next interest rate resolution.