Fed’s Harker says balance sheet runoff should be steeper than last time

– The Federal Reserve should raise interest rates at least three times this year to combat high inflation and reduce its balance sheet more quickly than it did after the global financial crisis, Philadelphia Fed President Patrick Harker said on Thursday.

After the Fed raises rates above zero, the central bank should “move into a normalization process” using a “glide path that will be steeper” than it used the last time because the balance sheet is larger, Harker said during an interview on CNBC.

Harker said earlier on Thursday that he could be convinced of the need for a fourth rate increase this year if inflation stays elevated.

(Reporting by Jonnelle Marte; Editing by Leslie Adler)