Daly Suggests Fed To Move Away From Extraordinary Economic Support

San Francisco Fed chair and FOMC member Mary Daly on Wednesday said that it is now time to move away from the Fed’s extraordinary support for the US economy. Daly has added that interest rates will be moving up this year to a level more consistent with where the economy exactly is.

Additional Quotes:

“It’s too early to call how far rates will need to rise this year”.

“We are on a path toward an economy with tighter monetary policy”.

“I expect we will start raising rates in March, and will be raising them in subsequent meetings to get closer to neutral”.

“How close to neutral rates will get is not certain and will depend on the data”.

“I don’t see anything right now that would disrupt plans for a March rate hike”.

“The geopolitical situation is part of larger uncertainty to navigate, but is not disrupting plans for liftoff”.

“Inflation is well above our goal”.

“We need to demonstrate that the Fed is committed not to allow perpetuating spiral of inflation”.

“Raising rates at least four times would be my preference”.

“Most likely it will need more than four rate hikes”.

“I am committed to getting demand and supply in balance”.

“Raising interest rates isn’t slamming the brakes on the economy”.

“The last thing you want is an economy that’s going too fast”.

“We want to gradually move rates up”. “Fed policymakers will deliberate whether balance sheet reductions will start after two rate hikes, or three rate hikes”.

“The timing and magnitude of rate hikes and balance sheet adjustments will depend on how the economy and data evolve.”

“It is appropriate to begin policy adjustment in March, absent any significant negative surprises.”

“By almost any measure, the economy is doing well and labuor market gains have been broad-based.”

“The focus for the next few years will be on bringing inflation back down, delivering a labour market that works for everyone, despite uncertainty.”

“Inflation is too high and has spread beyond Covid-affected sectors.”

“As the Fed adjusts policy and we move to a post-pandemic world, we need to keep in mind pre-pandemic challenges, including downward pressure on inflation.”