Federal Reserve Bank of Philadelphia leader Patrick Harker said that the U.S. central bank is approaching a point where it may be able to moderate the pace of its rate rise campaign aimed at lowering too-high levels of inflation, Reuters reported. “In the upcoming months, in light of the cumulative tightening we have achieved, I expect we will slow the pace of our rate hikes as we approach a sufficiently restrictive stance,” Harker said. But moving from what had been 75 basis point increases to something like a half percentage point rise would still be a significant action. Harker added, “at some point next year, I expect we will hold at a restrictive rate for a while to let monetary policy do its work” as more expensive borrowing costs impact the economy. The central banker said what happens after that will be driven by the data and added “if we have to, we can always tighten further, based on the data.” The policymaker gave some guidance about where he believes the central bank can stop and take stock of its work. "I am in the camp of wanting to get to what would clearly be a restrictive stance, somewhere north of four-ish, you know, four and a half percent, and then I would be OK with taking a brief pause, seeing how things are moving." Harker said. The rate-setting Federal Open Market Committee has increased the cost of short-term borrowing very rapidly this year, moving from a near zero short-term rate target to between 3.75% and 4% following last week’s 75 basis point rate rise.
