Fed's Harker said his outlook is still "net positive"
Fed's Harker said his outlook is still "net positive" in his speech on Revisiting the Discourse on Dynamism. However, there are some risks to which he's paying close attention, including business reports of rising uncertainty and decreasing confidence dampening the investment outlook somewhat. Global factors are also holding his attention, along with renewed concern about the yield curve. On the latter he cautioned that it's not a foolproof indicator of recession. And while he sees a "fundamentally sound" economy," with a "strong labor market, muted inflation, sustained moderate growth, and the penumbra of uncertainty — I continue to be in wait-and-see mode, and my outlook for rates remains, at most, one hike for 2019 and one for 2020." That's consistent with our view, but at odds with the markets where a rate cut is projected as the next move. Harker has been a centrist-hawk as this stance is in line with that position. He is not an FOMC voter, however, so he has less influence on policy this year.