Philadelphia Fed President Patrick Harker on his outlook on inflation and potential future rate hikes

Philadelphia Fed President Patrick Harker joined Yahoo Finance Live Anchor Brian Cheung on June 22, 2022 to discuss future rate hikes and getting ‘to neutral.’

Video Transcript

PATRICK HARKER: We need to get to neutral-- my estimate of neutral is 2 and 1/2%-- quickly. But not-- we don't have to overdo it. We don't have to rush too quickly. But we need to get there soon. And then end the year above neutral and somewhere above 3% in a restrictive stance of policy to start to bring and continue to bring demand down.

BRIAN CHEUNG: Fed Chair Jay Powell laid out pretty clearly that the decision for at least the next meeting at the end of July is between 50 basis points and 75 basis points. Where do you kind of lean on that right now?

PATRICK HARKER: Again, I'm not ready to make a final decision there, but it's exactly where I am, between 50 and 75, if we start to see demand soften. And we are seeing some signs that demand is starting to soften in certain sectors of the economy. And if it's softening quicker than I anticipate, then it may be appropriate to go with a 50. If it's not, then it's probably appropriate to go with the 75. Let's see how the data turns out in the next few weeks.