Investing.com -- Philadelphia Federal Reserve Bank President Patrick Harker on Thursday advocated for maintaining short-term U.S. borrowing costs at their present range of 4.25%-4.50%. Harker believes this level will aid in bringing inflation down to the Federal Reserve’s 2% target without adversely affecting the job market or the broader economy.

Harker shared that the current policy rate is restrictive enough to exert downward pressure on inflation in the long term, without negatively impacting the rest of the economy. His remarks were prepared for a delivery in Newark, Delaware.

Harker acknowledged that the labor market is decelerating, but it continues to generate jobs at a healthy rate. He also noted that the economy is slowing down, yet it continues to grow.

Recent inflation data indicates a slowing and uneven progress toward the Fed’s 2% target. Consumer prices in January rose unexpectedly at the fastest rate in a year and a half. However, Harker, like many Fed policymakers, advises against making decisions based on a single month’s report. The Fed is set to review its preferred inflation indicator on Friday, with economists predicting it to show inflation remaining high but continuing to slow.

Harker pointed out a potential concern with more than one in 10 credit card accounts only making minimum monthly payments, which could be a precursor to missed payments or delinquencies. However, he stated that the economy entered this year in a relatively healthy and strong position.

Harker believes that the current economic data supports an optimistic outlook, despite the challenge of bringing inflation back to the target. He advocates letting monetary policy continue to work.

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