Fed Official: It’s time to start talking about slowing rate hikes

On Friday, San Francisco Federal Reserve President Mary Daly warned that the US central bank should avoid putting the economy into an “unforced downturn” by raising interest rates too sharply, adding that it’s time to start talking about slowing the pace of the hikes in borrowing costs.

The Fed is widely expected to raise its benchmark overnight interest rate by 75 basis points for a fourth consecutive time at a November 1-2 policy meeting, as the central bank seek to control the highest inflation in 40 years.

The aggressive policy tightening has lifted that rate from the near-zero level in March to the current 3.00%-3.25% range.

“We might find ourselves, and the markets have certainly priced this in, with another 75-basis-point increase,” Daly said at a meeting of the University of California, Berkeley’s Fisher Center for Real Estate & Urban Economics’ Policy Advisory Board in Monterey, California. “But I would really recommend people don’t take that away and think, well it’s 75 forever.”