Fed's Harker (hawk, FOMC voter): two more rate rises are likely this year; economy is essentially at normal now; labor market is at full health
- Q1 weakness was likely temporary; sees FY GDP growth at 2.3% this year
- Sees jobless rate likely down to 4.2% by late 2018
- There's very little slack left in the labor market; expects job growth to remain ~200K/mo for remainder of year
- Monthly job gains to slow in 2018 but that's OK; 70-100K monthly job gains keep hiring at equilibrium
Q&A with reporters: speed-up in inflation could mean more than two rate hikes this year
- Possible could do a balance sheet move after one more rate hike
- Sees a moderate pace of slowing balance sheet reinvestment
- Should be willing to adjust the balance sheet runoff as needed; dollar limits on monthly bond runoff could start low and rise over time