FED Says Inflation Will Not Be A Threat In The Short Term

  On Thursday, Philadelphia Federal Reserve Governor Patrick Harker said that there is no need for the central bank to worry about inflation anytime soon. In a CNBC interview, Harker was faced with a question recently asked to Fed officials about whether easy monetary policy will fuel price pressures and whether to intervene in the volatile economy situation. Inflation was well below the Fed's traditional 2 percent target. While the consumer price index for January caused price increases in some areas of the economy, it can be said that the overall picture remained silent. Patrick Harker says on the Closing Bell program, “What I'm looking at is not just the level of inflation, but also its acceleration and deceleration. We, as the Federal Open Market Committee, are committed to exceeding the 2 percent inflation rate for a period of time, but that needs to be sustained above 2 percent for some time."

The FOMC made this commitment when it stated its flexible average inflation targeting policy last year.

This means that inflation could rise above 2 percent for a while before the Fed stepped in with rate hikes. Fed officials think letting the economy move for a while will help reduce unemployment, which is currently 6.3 percent, while also making job gains more inclusive in terms of rate and income.

Patrick Harker emphasizes that the inflation may create problems, but it is not a factor at the moment.

Harker said, "I don't see inflation rising above 2 percent anytime soon, so I'm not so worried about this risk right now. In the medium or long term it is of course an issue to be taken into account, but not now."

The Philadelphia Fed joined forces with the Cleveland Fed to start a support program called the Occupational Mobility Explorer. The program tries to match workers who have lost their jobs with jobs that require similar skills but pay more.

Patrick Harker said, "I think this tool is incredibly powerful and right now is the time to start using it."   FED Says Inflation Will Not Be A Threat In The Short Term FED Patrick Harker Source: https://www.cnbc.com/ You may also be interested in:

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