Philadelphia Fed President Harker advocates for interest rate cut in September

cnbc.com:

Philadelphia Federal Reserve President Patrick Harker on Thursday provided a strong endorsement to an interest rate cut on the way September.

Speaking to CNBC from the Fed's annual retreat in Jackson Hole, Wyoming, Harker gave the most direct statement yet from a central bank official that monetary policy easing is almost a certainty when officials meeting again in less than a month.

The position comes a day after minutes from the last Fed policy meeting gave a solid indication of a cut ahead, as officials gain more confidence in where inflation is headed and look to head off any potential weakness in the labor market.

«I think it means this September we need to start a process of moving rates down,» Harker told CNBC's Steve Liesman during a "Squawk on the Street" interview. Harker said the Fed should ease «methodically and signal well in advance.»

With markets pricing in a 100% certainty of a quarter percentage point, or 25 basis point cut, and about a 1-in-4 chance of a 50 basis point reduction, Harker said it's still a toss-up in his mind.

«Right now, I'm not in the camp of 25 or 50. I need to see a couple more weeks of data,» he said.

The Fed has held its benchmark overnight borrowing rate in a range between 5.25%-5.5% since July 2023 as it tackles a lingering inflation problem. Markets briefly rebelled after the July Fed meeting when officials signaled they still had not seen enough evidence to start bringing down rates.

However, since then policymakers have acknowledged that it soon will be appropriate to ease. Harker said policy will be made independently of political concerns as the presidential election looms in the background.

«I am very proud of being at the Fed, where we are proud technocrats,» he said.