- Philadelphia Fed chief favors liftoff this month, no delay
- Harker's comments are his first on policy since starting job
Patrick Harker, president of the Federal Reserve Bank of Philadelphia, said the Fed should raise interest rates "sooner rather than later" to allow a gradual pace of increases going forward, in his first public comments on monetary policy since taking office.
“My fear is that the Federal Reserve risks losing its credibility and only adds uncertainty to the economic landscape the longer the Committee waits to begin normalizing policy,” Harker said on Friday in remarks prepared for delivery at a Fed policy forum in Philadelphia. Harker took the helm of the Philadelphia branch of the U.S. central bank in July.
“Raising rates this year will, in my view, serve to reduce monetary policy uncertainty and to keep the economy on track for sustained growth with price stability,” Harker said.
The policy-setting Federal Open Market Committee is debating whether to increase its main interest rate for the first time since 2006, a move that’s widely expected at policy makers’ Dec. 15-16 meeting. Officials are looking for signs that the labor market is approaching maximum employment and inflation will rise toward their 2 percent goal.
While Harker, 57, does not vote on monetary policy until 2017, his views matter because he has a seat at the table when policy makers discuss interest rate decisions.
"Economic fundamentals have been improving, and we are approaching normalcy," Harker said, adding that he expects steady and modest growth going forward.
Harker was formerly president of the University of Delaware and is a former dean of the Wharton School of the University of Pennsylvania. Harker’s predecessor, Charles Plosser, was an advocate of raising interest rates and a consistent critic of the Fed’s easy monetary policy. Plosser retired in March.