Speaking to an audience at the Philadelphia Council for Business Economics, the president of the Federal Reserve Bank of Philadelphia struck a tone of cautious optimism about the U.S. economy, despite the uncertainty.
Philadelphia Fed President Patrick Harker said the uncertain environment will require the Fed to maintain a “certain and deliberate” approach to monetary policy.
“Like many, I have no choice but to use and reuse the term ‘uncertainty’ to describe the overall outlook. But even in a time of uncertainty, we remain as certain and deliberate as ever in our approach. The data I am receiving — both hard data and soft data — could allow me to present multiple outlooks. But as I have said before, we must work within that which we know is happening, not what we wish to see happen.”
This was Harker’s final speech before retiring on June 30, when his term ends.
“America’s economy remains resilient. I do not see any dangerous cracks in the foundation. But there are stressors on this foundation,” Harker said.
In his speech, Harker also discussed the Federal Reserve’s process of balance sheet “normalization.” He also talked about the Federal Open Market Committee’s (FOMC) “gradual, predictable, and boring” process to limit potential financial market disruptions.
Finally, he reiterated the importance of Federal Reserve independence. Harker also called on economic leaders to listen to community voices in shaping monetary policy, and issued a warning about the possible future impacts of debt on the economy and monetary policy.