(Adds December rate hike comments, writes through)
By Padraic Halpin and Conor Humphries
DUBLIN, Sept 29 December's U.S. Federal Reserve
meeting would be an appropriate time to raise interest rates if
the economy continues to move in the direction that it
anticipates, Philadelphia Fed President Patrick Harker said on
Harker said that he would have been very comfortable with a
rate hike in September but that there was some disagreement
among colleagues on how much slack remained in the labour market
and when and by how much the Fed would exceed its 2 percent
"Between now and December, to me I think we'll have enough
(data) that if things continue on the trajectory that I
anticipate that December would be an appropriate time for a rate
increase," Harker told reporters in Dublin.
Harker, who is one of 12 regional bank presidents but does
not currently have a vote on the Fed's rate-setting policy
committee, said the central bank risks falling behind the curve
if it does not normalise rates sooner rather than later. He said
that even its November policy meeting should not be ignored.
The Fed left rates unchanged last week but signaled clearly
that it could tighten monetary policy by the end of the year,
with many investors now expecting a rate rise in
Harker said in an earlier interview with Bloomberg
Television that the United States would reach the Fed's target
inflation rate of 2 percent soon once energy and commodity
prices firm, and that policymakers should lift rates in
"I am convinced we will achieve that (2 percent rate) sooner
rather than later so I am somewhat concerned about falling
behind the curve," Harker said.
Investors continue to see just better-than-even odds of a
hike at the December policy meeting, and almost no chance of an
increase in November.
But Harker said the November meeting should not be written
off because "we don't know what's going to happen between now
He said it was "not clear yet" if a rate rise in December
would be enough for rate rises to keep pace with inflation and
avoid the economy overheating.
Three regional Fed presidents dissented from the central
bank's decision last week to keep rates steady, and several have
begun citing concerns about financial stability and the need for
the Fed to act in time to prevent any rapid run-up in prices.
Harker said one point of agreement among Federal Reserve
members was that accommodative monetary policy should not be
removed too quickly.
"I wouldn't say there's great dissent other than the speed
at which we remove accommodation," he said. "But nobody thinks
that we should do that quickly - it will be a shallow path."
(Reporting by Conor Humphries, Padraic Halpin and Andy Bruce;
Editing by Hugh Lawson)