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With U.S. inflation higher than desired and a very robust labor market, investors can expect “a fair amount of tightening in 2022,” said Patrick Harker, the president of the Philadelphia Fed, on Thursday.
“We can probably expect a rate hike of 25 basis points. We could very well continue to raise rates throughout the year as the data evolve,” Harker said, in a speech on the economic outlook to a conference sponsored by the Philadelphia Business Journal.
Harker said GDP growth would likely slow from the 5% rate seen in 2021.
“I expect growth to be a little slower this year, perhaps in the range of three to four percent,” Harker said. He is not a voting member of the Fed’s interest-rate setting committee this year.
In his speech, Harker said the first quarter “will be tough,” as omicron continues to spread throughout the economy.
“Later this year, even after omicron has – hopefully- faded, financial conditions should tighten and pandemic stimulus programs will wane, somewhat depressing growth,” he said.
U.S. stocks
DJIA,
SPX,
were set to open higher Thursday as the focus pivoted from inflation to corporate earnings.
