San Francisco Fed President Daly: More Time Needed

San Francisco Fed President Mary Daly said it could take “more time” for inflation to return to the central bank’s target. San Francisco Fed President Mary Daly said interest rates are currently holding the economy back but it could take “more time” for inflation to return to the central bank’s target. “We are being restrictive, but it could take more time to get inflation down,” Daly said at George Mason University on Thursday, echoing comments made by Fed Chair Jerome Powell on April 16. “There is significant uncertainty about what inflation will be over the next few months and what we need to do in response,” Daly said, adding that recent data showing price pressures picking up earlier this year underscored why officials cannot declare victory until they are confident that inflation is under control. The comments underscored Fed officials’ willingness to keep the central bank’s benchmark interest rate steady until they are confident that inflation will continue to ease toward its 2% target. Prices, measured by the Fed’s preferred inflation index, rose 2.7% in March from a year earlier. That was stronger growth than economists had expected and a rebound from the previous three months. Fed officials have kept interest rates between 5.25% and 5.5%, a 23-year high, since last July.