Federal Reserve (Fed) Bank of Philadelphia President Patrick Harker is embarking on a farewell tour. The Philly Fed head is set to retire at the end of June, and is taking the opportunity to deliver some hope to investors that the Fed may still yet find itself in a position to deliver rate cuts before the year is over. However, Harker attached some notable caveats to his hopeful outlook, cautioning that deteriorating economic data in the face of extreme policy swings, as well a burgeoning budget deficit from the federal government, could waylay rate cuts.
Key highlights
Amid uncertainty, it’s still possible the Fed can cut rates later this year.
Uncertainty makes it very hard to divine monetary policy outlook.
I’m worried the quality of economic data is eroding.
We’re increasingly flying blind when it comes to critical data.
I’m very worried about the current state of government finance.
Deficits must be reined in amid rising challenges to the US financial system.
