Did she not get the memo?
Daly speaking
-
Decline in goods inflation has been an easy win, and not largely due
to the Fed’s rate hikes - Just starting to see
improvement in non-housing services inflation, need more of it - We have more work to
do, inflation is still high - Fed policy is
helping supply and demand get into a better balance - In future could see
the nominal neutral rate go to 2.5%-3% - The new normal may
be a little different, but probably won’t be a gigantic reset - I don’t manage markets, I watch them for information
- If bond yields are tight, that could be the equivalent of another rate hike
- The risks to the economy are more balanced
- We need to get inflation down to fully balance the economy
Mary Daly is President and Chief Executive Officer of the Federal Reserve Bank of San Francisco.