San Francisco Federal Reserve President Mary Daly noted that firmer monetary policy is contributing to the moderating of inflation. She did not specify a direction for future rates; instead, she observed that the Fed is presently situated so that it can assess incoming data and act as needed.
Inflation is still too high for policymakers to be completely comfortable, according to San Francisco Federal Reserve President Mary Daly, who said on Friday that tighter monetary policy is helping to slow inflation down. The central bank official was asked about Chair Jerome Powell's comments the day before that the Fed wasn't certain rates were tight enough to hit their 2% target. Comparing the Fed's policy evaluation to riding a horse and seeing if the bridle is pulled back far enough, Daly said that "we know we're significantly restrictive. But to really be truly confident that we have a sufficient level of restriction in the economy to bring inflation down, we're going to have to watch the data and see if the economy is slowing." The Federal Open Market Committee (FOMC) decided to hold rates again at its last meeting, with the benchmark borrowing rate at 5.25-5.5%, the highest in 22 years. When asked about the future of rates, Daly said that the Fed would be looking to the data to decide what moves to make. She said that "we're in a good place because we can be able to move easily and agilely, depending on what the data brings."
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