By Michael S. Derby 

The president of the Philadelphia Federal Reserve Bank, Patrick Harker, said the U.S. economy is in good shape right now, adding that how economic data come in will drive what central bank officials do with interest-rate policy.

"My outlook for the economy is positive, but let me add that my outlook will continue to be driven by the data as each report is released throughout 2020," Mr. Harker said in a speech prepared for delivery before a banking group in New Jersey. He added, "The data will also determine my view on monetary policy. And policy entails more than interest rates," in reference to the central bank's continuing technical challenges controlling money-market interest rates.

"The data show that the labor market is doing incredibly well, and I believe the economy is nearing our target inflation rate of 2%," he said.

Mr. Harker will be a voting member of the rate setting Federal Open Market Committee this year. Officials cut their overnight target-rate range three times last year as they sought to offset risks to the outlook posed by slowing global growth and trade uncertainty.

At their December FOMC meeting, policy makers strongly signaled they expect rates to hold steady for the year at the current range of between 1.5% and 1.75%. Officials who have spoken this year have affirmed that, and in a speech on Wednesday, Mr. Harker joined with that view and said he believes monetary policy is now in a "good place" and "I don't think we need to move rates in either direction" anytime soon.

Mr. Harker repeated in his speech Friday that the Fed still wants to move to a system where it doesn't have to actively intervene in money markets to achieve interest rate control, while observing the central bank is still working out how to get to that point.

Write to Michael S. Derby at michael.derby@wsj.com

(END) Dow Jones Newswires

January 17, 2020 09:37 ET (14:37 GMT)