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Investing.com -- Philadelphia Federal Reserve President Patrick Harker on Thursday flagged upside risks to inflation and growing threats to economic growth, but the Philly Fed president stopped short of making call on the Fed’s possible next rate move.
While the economy still appears to be growing, with "still low unemployment," Harker acknowledged that "threats to this."
"We’re starting to see that confidence is starting to wane" on both the consumer and business fronts, Harker said in remarks at his regional Fed bank," he added.
Concerns about a growth come a time when recent data have shown a jump in inflation expectations, posing a risk to the outlook for inflation.
While he still maintains that inflation will eventually slow toward the central bank’s 2% target. the Philly Fed chief admitted that he is "worried that right now" that the deflationary inflation trend "is at risk."
The current jitters about a slowing economy and a possible new lease for inflation have placed stagflation fears front and center.
But some economists have downplayed the prospect of stagflation, citing little evidence of a meaningful stagnation in the economy and a lack of evidence that inflation expectations are becoming de anchored.
The monthly nonfarm payrolls report on Friday will provide further insight into the economy.
"Big data indicators point to firm job growth, though we expect a 10k drag from federal government layoffs and a hiring freeze and a 5k drag from strikes," Goldman Sachs said in a recent note, forecasting 170,000 increase in payrolls for February.