Fed's Harker: Action May Be Needed Soon if Inflation Trends Do Not Cool

On June 2, Fed's Harker stated that given the many uncertainties in the economic outlook, maintaining the current interest rates is reasonable, but officials may need to act quickly to address the rising inflation issue. Harker expressed greater concern about inflation, which has exceeded the Fed's 2% target level for over five years, while she is less worried about the strong performance of the labor market. She noted that the Fed's benchmark interest rate 'may not be restrictive,' and she has not heard complaints from business owners that high rates are hindering their investments. Price pressures are 'broadly distributed,' affecting both goods and non-housing services.