Fed's Harker:

  • When the Fed funds rate hits 100 bps, we need to think about stopping reinvestment

For some background, the Fed has a huge balance sheet of bonds that it bought via QE programs. When a bond expires, the Fed currently buys another one. If they stop doing that, the portfolio will slowly run off as bonds mature.

On rates:

  • We need to see more data before determining when the next hike will come
  • To incorporate fiscal changes into his forecasts, he will need to see a bill before Congress

Thumbs up on the last point, I don't think it's wise for the Fed to be making forecasts based on election promises.