Fed’s Harker: Not expecting rate hike until late 2022 or early 2023

Philadelphia Fed President Patrick Harker crossed the wires in the last hour and reaffirmed market expectations that the US central bank will soon begin tapering its asset purchases.

Key quotes:

• It will soon be time to begin slowly and methodically tapering asset purchases.
• Would not expect any interest rate hikes until late 2022 or early 2023.
• Expect GDP growth to come in at around 6.5% in 2021 before moderating to about 3.5% in 2022.
• Inflation should come in around 4% for 2021 and a bit over 2% for 2022.
• Failure by Congress to raise the debt ceiling could harm economic growth significantly.

Market reaction:

The comments did little to influence the US dollar, which shot to the highest level since November 2020. In fact, the key USD Index, which measures the greenback's performance against a basket of currencies, is now looking to build on the momentum further beyond the 94.00 mark.