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Business confidence in Trump has not translated into much action, Fed's Harker argues

Philadelphia Federal Reserve President Patrick Harker told CNBC on Monday that he won't be able to judge the economic impact of President Donald Trump's fiscal agenda until it's fleshed out.

"I don't know what exactly those policies are yet," Harker said on "Squawk on the Street," referring to promises of broad tax cuts and $1 trillion in infrastructure spending.

"Once we see something that looks likely ... then I can factor that in," he said.

Harker, a voting member this year on the Fed's policy-setting committee, acknowledged the rise in consumer and business confidence since Trump won the election.

"[But] confidence has to translate into action," he argued, something he said he's yet to see in his region. Businesses want specifics on policy before increasing investment, he added.

On monetary policy, three Fed interest rate hikes for 2017 still seem appropriate, Harker said. "I'd like to pace those out ... over the course of the year. So having one in March just made sense."

In a highly anticipated move last week, the central bank voted to raise rates — only the third increase in nearly 11 years. The Fed still projects two more rate hikes this year.

In an earlier interview on "Squawk Box," Minneapolis Fed President Neel Kashkari said he voted against the March rate increase because inflation was still below the central bank's target.

Kashkari, the lone dissenter and also a policy voting member this year, cited core inflation, which excludes food and energy prices, at 1.7 percent as still far away from 2 percent.

But Harker said the Fed's 2 percent target is measured against headline inflation, which includes food and energy.

"I think we're there and moving in the right direction. There will be a little bit of an overshoot and that's OK," the Philadelphia Fed president argued.

Kashkari said he would rather see the central bank start unwinding its $4.5 trillion balance sheet before moving again on rates.

The Fed is discussing that, Harker said. "Once I feel like the economy continues on this path of strengthening and we're solidly in that zone, then we can stop reinvestment."