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"While the Fed cannot do much to ameliorate the supply issues
that are increasing inflation, we can begin to affect demand,"
Harker said in remarks prepared for delivery at Rider University
in Lawrence Township, New Jersey.
The speech reiterated Harker's recent views on the outlook and
the effect of tighter monetary policy, which he said will help
reduce economic growth this year to around 3.5% and to 2% to
2.5% in the next couple years.
Inflation too "should begin to taper" this year, he said, ending
2022 at around 4% and over the next couple years falling to the
Fed's 2% target.
Fed policymakers began raising rates last month with a
quarter-of-a-percentage point increase, and are expected to
accelerate their pace of policy tightening when they next meet
in May.
Interest rate futures traders currently expect the Fed to
deliver half-point interest rate hikes at its next three
meetings before returning to quarter-point hikes for the last
three meetings of the year.
That would bring the Fed's policy rate, now in the range of
0.25% to 0.5%, to a range of 2.5% to 2.75% by the end of the
year.
(Reporting by Ann Saphir; editing by Diane Craft)
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