Interest rate message from San Francisco Fed President Daly

San Francisco Fed President Mary Daly said she is looking for greater confidence that inflation is returning to the Fed’s 2% target. San Francisco Fed President Mary Daly said Thursday that she is looking for greater confidence that inflation is returning to the Fed’s 2% target before calling for a rate cut. “We don’t have price stability right now. We’ve had some really good data, some good data on inflation and good data after the beginning of the year, but we’re not there yet in terms of getting inflation back to 2% in a sustainable way,” Daly said. Monetary policy is currently playing a balancing act. “There’s a risk of moving too early to normalize rates and having inflation stay above or below our target and there’s a risk that it stays there for too long and disrupts the labor market.” Daly warned of patience on the possibility of a rate cut. The Fed is expected to cut rates in September, but some say the central bank should take action at its July meeting because price pressures have eased.