Fed’s Harker ready to start rate cut process

In an interview with Reuters on Thursday, Philadelphia Federal Reserve Bank President Patrick Harker expressed support for a potential interest rate cut in September, provided economic data aligns with his expectations.

Discussing the possibility of lowering the cost of short-term loans, Harker told the publication, “To me, barring any surprise in the data that we get between now and then, I think we need to start that process” of lowering rates.

He made the remarks during an interview with Reuters while attending the Kansas City Fed’s annual research conference in Jackson Hole, Wyoming.

Harker emphasized that the size of any one-off rate cut is less critical than the overall strategy of gradual cuts, telling Reuters he believes “a slow and methodical approach to tapering is the right way to go.”

He also stressed that his business contacts prefer a predictable and steady approach to rate cuts rather than a repeat of the rapid increases that have been implemented since spring 2022.

Harker’s comments follow the release of meeting minutes from the Federal Reserve’s July meeting, which indicated the “vast majority” of policymakers are inclined to support an interest rate cut in September if economic data meets expectations .

His remarks came just before Fed Chairman Jerome Powell’s highly anticipated remarks at the same conference, Reuters reported.