Fed's Harker is ready to start methodical course of rate cuts

By Michael S. Derby

NEW YORK (Reuters) - Federal Reserve Bank of Philadelphia President Patrick Harker said Thursday he was on board with a September rate cut as long as the data performs as he expects it to.

When it comes to an imminent move down in the cost of short-term borrowing, “for me, barring any surprise in the data we'll get between now and then, I think we need to start this process” of lowering rates, Harker said in an interview with Reuters as he attends the Kansas City Fed’s annual research conference in Jackson Hole, Wyoming.

Harker said the size of any given move was less important than how the overall scope of cuts plays out, noting “I think a slow, methodical approach down is the right way to go.” He said his business contacts are calling for predictable action and do not want the move down in rates to mirror the aggressive increases that defined the campaign that lifted rates from near zero levels in the spring of 2022.

Harker spoke in the wake of meeting minutes released Wednesday for the central bank’s July meeting, and just ahead of a hotly anticipated set of remarks due Friday by Fed Chairman Jerome Powell at the conference.

The minutes said that as of the July Federal Open Market Committee meeting, the “vast majority” of policymakers expect the central bank will cut rates in September if the data does what it’s expected to do.

(Reporting by Michael S. Derby; Editing by Chizu Nomiyama)