Federal Reserve (Fed) Bank of San Francisco President Mary Daly noted on Monday that despite recent relief in inflation figures, the Fed will have no choice but to keep policy rates pinned higher for longer if price growth doesn't continue cooling to the Fed's 2% target range.
Fed eral Reserve Bank of San Francisco President Mary Daly noted on Monday that despite recent relief in inflation figures, the Fed will have no choice but to keep policy rates pinned higher for longer if price growth doesn't continue cooling to the Fed 's 2% target range. Key highlights Inflation is not the only risk. We have made a lot of progress on inflation, there is still work to do. The bumpiness of inflation data so far this year has not inspired confidence.
If inflation falls rapidly or the labor market softens more than expected, lowering the policy rate would be necessary. If inflation falls more slowly than expected, the policy rate must stay higher for longer. We are nearer to a point where benign outcome on labor market could be less likely. At this point, we have a good labor market, not a frothy one. Restrained demand, not improved supply is likely needed to get inflation to 2% goal.
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