Central Banks
Fed Should Be Mindful of Lags as It Tightens Rates Further, Daly Says
- San Francisco Fed chief cites lags, cumulative tightening
- Says financial markets behaving as if Fed rates are around 6%
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San Francisco Fed President Mary Daly said that officials will need to be mindful of the lags with which monetary policy works, while repeating that she sees interest rates rising to at least 5%.
“As we work to bring policy to a sufficiently restrictive stance -- the level required to bring inflation down and restore price stability -- we will need to be mindful,” Daly told the Orange County Business Council on Monday in Irvine, California. “Adjusting too little will leave inflation too high. Adjusting too much could lead to an unnecessarily painful downturn.”