TechFlow news, December 12 — Philadelphia Fed President Patrick Harker said Friday that her current primary focus is on labor market conditions, and the current monetary policy stance should help bring inflation back toward the 2% target. She stated: "My concern about labor market weakness remains slightly greater than my concern about upside inflation risks." This is partly because "I believe inflation is quite likely to gradually decline next year as the impact of tariffs fades." Although Harker did not provide explicit forward guidance in her remarks, she emphasized: "I still believe monetary policy remains somewhat restrictive." This level of interest rates, combined with the cumulative effects of past tightening, should help bring inflation back to the 2% target. Harker described the current labor market as "bending but not broken," and noted that "with the 75 basis points of rate cuts over the past three meetings, we have provided some insurance against further deterioration in the labor market." Harker pointed out that the situation will become clearer early next year (when she will become a voting member of the FOMC), at which point more information will be available. (Jinshi)
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