San Francisco Fed President Mary Daly expects the central bank to raise interest rates further, though she says the timing and size of any move are undecided. She spoke on the day a jobs report beat Wall Street expectations, and she warned that wages are not keeping pace with inflation.
San Francisco Fed President Mary Daly said Friday she expects the Fed to raise rates further, while noting that the pace and timing remain uncertain. In a live CNBC interview, Daly said: "My expectation is we're going to have to tighten policy further."
She added that she is prepared to act if the economy calls for it. Daly will vote on the Federal Open Market Committee next year and still favors a gradual approach.
Jobs beat forecasts, but wages lag inflation
The Bureau of Labor Statistics reported that the U.S. economy added 165,000 jobs in October, nearly triple the Dow Jones consensus estimate. The unemployment rate edged lower to 4.1%.
Daly called the report good news for American workers but pointed to pressure on household budgets. Average hourly earnings rose 3.1% annually in October, while the September consumer price index showed inflation at 3.7%.
The policymaker said she is not concerned generally about economic growth but worries about the persistence of inflation. She described the job market as stable and solid, but not booming.
The Fed paused after a September increase
The FOMC in September raised its benchmark overnight borrowing rate by a quarter percentage point to a target range of 3.75%-4%. Last week, the committee declined to follow that rate hike with another move, saying it preferred to wait for more information.
Daly said she supported the September decision and thought it was good to be on hold at the last meeting. Richmond Fed President Thomas Barkin said Thursday he also sees higher rates ahead but is unsure of the timeline.
Source: CNBC
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