Sep 29 (Businesshala) – The Federal Reserve’s massive asset purchases helped stabilize markets at the start of the pandemic, but it will be “soon” to start easing them, Philadelphia Fed Bank President Patrick Harker said on Wednesday. said.
“I am in the camp that believes it will soon be time to slowly and systematically – frankly, boringly – add up to our $120 billion in monthly purchases of Treasury bills and mortgage-backed securities. reducing,” Harker said in remarks prepared for a virtual event.
Harker said he expects the US economy to grow about 6.5% in 2021 and then to about 3.5% in 2022 for “moderate” growth.
The Fed official said he expects inflation to be around 4% for 2021, before it exceeds 2% for 2022. “We’re already seeing some moderation, as prices for older cars eventually stabilize,” Harker said.
He also warned of negative economic consequences in the short term if Congress fails to raise the debt limit, adding that “it could significantly hurt economic growth.”
Harker will vote as an option at the Fed’s monetary policy meetings next year until a replacement is selected for Boston Fed Chairman Eric Rosengren, who announced earlier this week that he would Retiring here.
Rosengren cited health reasons for his decision and was also facing questions about investment trades made in 2020 while the Fed took action to stabilize financial markets and the economy. (Reporting by Jonal Marte; Editing by Andrea Ricci)