Fed's Harker: We should be above 3% by end of year

In an interview with Yahoo Finance on Wednesday, Philadelphia Fed President Patrick Harker said they need to get to the neutral rate of 2.5% quickly and lift it above 3% by the end of the year, as reported by Reuters.

Additional takeaways

"75 bps rate hike helps us get to neutral stance."

"Not ready to make a decision on whether July should be 75 bps or 50 bps."

"If demand softens quicker than I expect, 50 bps hike for July may be good."

"We need to move to a restrictive stance; how we get there depends on data."

"Starting to see signs of demand softening, which is what we want."

"We want to bring economy into a safe position."

"Inflation could still be north of 5% next year, then down to 2.5% following year."

"Could have a couple of negative GDP quarters."

"We still have very tight labor market."

"Don't expect unemployment to rise significantly above 4%."

"Employers don't want to let their employees go, don't see a rapid increase in unemployment."

"Might see pullback on job postings first."

"We're going to continue to have tight labor markets, in my view."

"Worried about fragility of supply chains, will take some time for supply chains to heal."

"Balance sheet shrinkage is essentially on autopilot."

"No concerns at this point on financial stability, but need to be cautious and watch."

"We want to bring inflation down in a way where we don't dramatically impact labor market."

Market reaction

The greenback lost interest after these comments and the US Dollar Index was last seen losing 0.15% on the day at 104.37.