Philadelphia Fed President Patrick Harker said on Thursday that he thinks that a fair amount of tightening can be expected this year. He added that he expects that Fed will complete the taper of asset purchases by March, and then, probably, will follow an increase in interest rates by 25 basis points, while more rate hikes will be made throughout the year as the data evolve.
Harker noted that he considers the interest rates as the Fed's primary monetary tool and added that the composition of the balance sheet is being actively discussed and he is open-minded on this issue. However, the policymaker suggested that reducing the balance sheet could start in late 2022 or early 2023.
Regarding rate hikes, Harker acknowledged that he has penciled in three rate hikes for 2022, but could be convinced of a fourth.