Fed's Harker: 'Considerable strength' in the economy, 3 rate hikes appropriate

Patrick T. Harker, president of the Federal Reserve Bank of Philadelphia
Charles Mostoller | Bloomberg | Getty Images
Patrick T. Harker, president of the Federal Reserve Bank of Philadelphia

Philadelphia Fed President Patrick Harker said Thursday the U.S. economy is displaying considerable strength and three interest rate hikes this year would be appropriate, in line with policymakers' previous expectations.

Harker, speaking on the economic outlook before the Main Line Chamber in Malvern, Pennsylvania, said 2017 is starting off on a "good foot" and inflation expectations are starting to rally. Still, he said monetary policy is a "limited set of tools" and growth policies are up to elected officials.

Harker is a voting member on the Federal Reserve's policy-setting committee.

In December, the Fed said it expects to raise rates three times this year, and approved the first rate hike in a year amid signs that the U.S. economy soon could shed its long period of sluggish growth.

Stocks and Treasury yields have skyrocketed since Donald Trump's Nov. 8 election victory amid the prospects of looser regulations in certain sectors, lower tax rates, and fiscal stimulus.

Harker said "confidence is strong, retail is solid" and the labor market is "more or less at full health." But he also said he is concerned with "prime age males" dropping out of the workforce and sees a "skill void" in the U.S. workforce.

U.S. jobless claims have fallen to a near 43-year low.

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