Fed's Harker: Fed to pare back asset purchases before raising rates

Before raising the federal funds rate, the Federal Reserve would pare back asset purchases, Philadelphia Fed President Patrick Harker said on Tuesday, as reported by Reuters.

Additional takeaways

"3% inflation is about the maximum I would like to see."

"Fed has the tools to deal with inflation that is accelerating."

"Inflation expectations are not unanchored."

"We need to invest in our infrastructure to keep the economy going."

"There are going to be bumps in getting the economy restarted."

"Supply shortages will get fixed."

"There may be skills and location mismatch between jobs and workers."

"Some workers may be looking for better jobs."

"Unemployment benefits may be playing a role."

"Some people dropped out of the labor force because of school closures."

Market reaction

The US Dollar Index showed little to no reaction to these comments and was last seen losing 0.13% on the day at 90.16.