The Federal Open Market Committee needs to raise interest rates at least another 100 basis points and then remain there to bring down inflation, Philadelphia Federal Reserve Bank President Patrick Harker said Thursday in a live interview on CNBC from the annual Jackson Hole Conference. The FOMC does not need to rush rates up and then quickly reverse course, Harker said, adding that rates “need to stay high for a while.” Harker said he believes rates will need to get above at least 3.4%-3.5% before they are maintained. The current range is 2.25% to 2.5%. The threat of a recession has some analysts and market participants believing that the FOMC will need to reduce rates next year, but Harker said that it is essential to bring inflation down “no matter what” and that he does not expect a deep or protracted downturn in the economy.
In line with comments that Kansas City Fed President Esther George made earlier Thursday, Harker said that he would like to see more incoming data before deciding whether a 50-basis point or 75-basis point move is more appropriate at the Sept. 20-21 meeting but noted that the even the smaller option would still be a “substantial move” by historical standards. NN: Is their any doubt at all what the FED is going to do……. They have no choice but to raise the hell out of interest rates……