Fed’s Harker: I think one cut is appropriate but could change depending on data

Harker speaks at a monetary policy conference:

• If my economic forecast plays out, I think one cut would be appropriate this year
• Two cuts or none also ‘quite possible’ depending on data
• More data is essential to come to a decision on rate cuts given choppiness so far this year
• Over the ensuing months I will continue to closely monitor data on inflation, labor markets and economic activity
• Keeping rates where they are for a bit longer will help get inflation down and mitigate upside risks
• Latest inflation data quite promising but falls short of confidence needed
• Long-term stubbornness of shelter inflation remains a concern, as does service sector inflation
• Last week’s CPI data very welcome but overall progress on inflation in recent months has been modest
• I still forecast slowing but above-trend growth, modest rise in unemployment rate and long glide back to 2% inflation

This sounds very much in line with the consensus and what Powell highlighted. We’re all data-watchers now.

This article was written by Adam Button at www.forexlive.com.