Philadelphia Federal Reserve President Harker supports keeping policy rates unchanged and adopting a cautious attitude to thoroughly evaluate all data.

Philadelphia Federal Reserve Bank President Patrick Harker said on Thursday that he supports keeping the short-term borrowing costs in the United States at the current level of 4.25%-4.5%. He believes that this interest rate range will help bring the inflation rate down to the Federal Reserve's 2% target without causing excessive harm to the labor market or the overall economy. Harker pointed out in a speech in Newark, Delaware, "The current policy rate still has enough restrictiveness to continue exerting downward pressure on inflation over the long term, which is what we need, without negatively impacting the overall economy." He stated that the labor market is slowing but still creating jobs at a steady pace, and while economic growth has cooled off, it is still expanding. Additionally, recent inflation data suggests that the progress towards the 2% inflation target has slowed down and shown fluctuations. The unexpected fastest increase in the Consumer Price Index (CPI) in a year and a half in January highlights the challenge of declining inflation. However, he emphasized that policy adjustments should not be made hastily based on just one month of data, a view that is common within the Federal Reserve. Harker said, "My cautious approach is to thoroughly examine all data, rather than reacting to a single month's inflation report." Economists expect the latest data for the Fed's preferred inflation gauge, the core personal consumption expenditures price index, to show that inflation remains high but is continuing to moderate. Harker also mentioned that a "yellow warning signal" he is monitoring is that over 10% of credit card accounts are only being maintained with minimum payments, which could indicate a rising risk of defaults or delinquencies in the future. However, he believes that overall, the U.S. economy is still in a "relatively healthy and robust state" at the beginning of this year. "I am inclined to let monetary policy continue to play a role," Harker said. "Based on the data I am currently seeing, I remain optimistic about the economic outlook, although bringing inflation back to target remains challenging."