By Michael S. Derby 

Philadelphia Fed leader Patrick Harker said human judgment is critical in making monetary policy, in comments that pushed back on the setting of interest-rate policy by rules alone.

"Rules are important, and inform a lot of our decisions," Mr. Harker said in the text of a speech to be delivered Monday in Boston. But, "they shouldn't be followed robotically."

In the real world, "monetary policy isn't that precise" and no set of rules can capture all of the factors central bankers must contend with. "Despite some of the smartest thinkers and the best models, we can't assign a degree of certainty to any of the variables," he said.

"One of the reasons monetary policy can't just be mechanized is that decisions have to be informed by human experience and past behavior -- as in any discipline, models may work in theory, but not necessarily under the messy complication of real-life conditions," Mr. Harker said.

The policy maker didn't comment on interest-rate policy or the economic outlook in his speech.

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

(END) Dow Jones Newswires

May 20, 2019 09:49 ET (13:49 GMT)