New Philadelphia Fed President Harker Backs December Interest Rate Hike

The economy is "approaching normalcy" and an interest rate hike is needed "sooner rather than later," said Patrick Harker, the president of the Philadelphia Fed, on Friday. "Raising rates this year will, in my view, serve to reduce monetary policy uncertainty and to keep the economy on track for sustained growth with price stability," Harker said in a speech at his bank's headquarters. "With an early start, we can better ensure that monetary accommodation is removed gradually and that inflation returns to the Fed's 2% target smoothly," he said, warning that delay would risk the Fed losing credibility and only adding uncertainty to the economy. These were Harker's first public comments on monetary policy since taking office five months ago. The new Philadelphia Fed president will not be a voter on the U.S. central banks's policy committee until 2017.