Philadelphia Fed chief says no need for another rate cut: report

2019-08-23 03:11:13 GMT2019-08-23 11:11:13(Beijing Time) Xinhua English

WASHINGTON, Aug. 22 (Xinhua) -- President of the Federal Reserve Bank of Philadelphia Patrick Harker said Thursday that there's no need for another cut to the benchmark interest rate, U.S. media reported.

"We're roughly where neutral is. It's hard to know exactly where neutral is, but I think we're roughly where neutral is right now," Harker told CNBC in Jackson Hole, Wyoming, where Federal Reserve officials convene the annual symposium Thursday through Saturday.

"And I think we should stay here for a while and see how things play out," said Harker, who currently is not a voting member of the Fed's rate-setting Federal Open Market Committee (FOMC).

Asked if there needs to be additional monetary easing, Harker said, "No, not right now." He said the labor markets remain strong, inflation is moving up slowly, and the last consumer price index "was a good print."

The Fed lowered the federal funds rate by 25 basis points to a target range of 2 percent to 2.25 percent at its July 30-31 meeting.

The move was supported by all but two FOMC participants, and those who voted in favor cited varying reasons, arguably leaving Fed Chairman Jerome Powell a hard task communicating with the public.

Also on Thursday, Kansas City Fed President Esther George, who along with Boston Fed chief Eric Rosengren voted in July to keep rates unchanged, told CNBC the central bank shouldn't have cut rates then.

"My sense was we've added accommodation, and it wasn't required in my view," George said. "With this very low unemployment rate, with wages rising, with the inflation rate staying close to the Fed's target, I think we're in a good place relative to the mandates that we're asked to achieve."

She also said risks facing the U.S. economy are tilting to the downside, and that the trade dispute with China is having an impact on business investment in the world's largest economy.

"As you look at global growth weakening and as you look at the amount of uncertainty associated with some of these trade issues, I think both of those are weighing on the outlook," George said. "Whether they spill over in a way that we see in the real economy is what I'm watching for."

As of Thursday morning, the market is expecting a 91.2 percent probability for a 25 basis point rate cut, down from Wednesday's 98.5 percent, according to CME Group's FedWatch Tool.

Powell is scheduled to deliver a much-anticipated speech in Jackson Hole on Friday, and the Fed's next policy meeting comes on Sept. 17-18.