Economics

Daly Says Fed Should Hike Rates Expeditiously to Neutral by Year-End

Sees strong case for 50 basis-point hike at May meeting
Moving purposefully to neutral stance is a top priority

WATCH: Bloomberg’s Mike McKee reports on the Fed’s Beige Book survey. Source: Bloomberg

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By Catarina Saraiva

April 20, 2022 at 3:25 PM UTC

Updated on

April 20, 2022 at 6:45 PM UTC

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U.S. central bankers should move “purposefully” and raise interest rates to neutral -- the level which neither speeds up nor slows down the economy -- by the end of the year, Federal Reserve Bank of San Francisco President Mary Daly said.

“I see an expeditious march to neutral by the end of the year as a prudent path,” Daly said Wednesday in a speech in Las Vegas, noting that most forecasters see that level lying around 2.5%. “Moving purposefully to a more neutral stance that does not stimulate the economy is the top priority.”