To The Moon

Fed's Harker sees 'lack of progress' on inflation, expects aggressive rate hikes ahead

TLDR:

• "We are going to keep raising rates for a while," the central bank official said in remarks for a speech in New lersey. "Given our frankly disappointing lack of progress on curtailing inflation, I expect we will be well above 4% by the end of the year."

• The latter comment was in reference to the fed funds rate, which currently is targeted in a range between 3%-3.25%.

• The expectation is that the Federal Open Market Committee, of which Harker is a nonvoting member this year, will then take rates a bit higher in 2023 before settling in a range around 4.5%-4.75%.

• "Sometime next year, we are going to stop hiking rates. At that point, I think we should hold at a restrictive rate for a while to let monetary policy do its work," he said. "It will take a while for the higher cost of capital to work its way through the economy. After that, if we have to, we can tighten further, based on the data."

He is not going to give up until things are back where it should be. Market will continue to be volatile.

Trade safely