Fed’s Daly: Changes in the labour market may lead to changes in policy

In an interview with Fox Business on Friday, Mary C. Daly, President of the San Francisco Fed discussed the Fed’s policy outlook. The San Francisco Fed President since 2018, Mary C. Daly will be rotating from an Alternate Member voting seat to a full Member for the 2024 Fed chair rotation when the Fed next meets on January 31, and she will directly vote on rate operations through the fiscal year.

Key Quotes

Early signs of faltering in the labor market could trigger policy adjustments.

It’s also important to watch for any rises in delinquency rates as an early indicator of economic weakness.

Fed needs to get inflation on a consistent trajectory to 2%, need further evidence to feel confident in rate adjustments.

Markets are premature in thinking rate cuts are just around the corner.

It is far too early to declare victory on inflation.