San Francisco Fed President Mary Daly says further rate hikes are more likely than not, but she sees no need to act at the October 27-28 meeting. She tied headline inflation to gasoline prices and described core inflation as sticky.
San Francisco Fed President Mary Daly said on Wednesday that the Federal Reserve will probably need to raise short-term interest rates further, but signaled there is no need to do so at its October 27-28 meeting. Daly made the remarks in an interview with Reuters.
Daly sees time to decide
Daly said the Fed is more likely than not to need additional adjustments, and that the timing is still under deliberation. According to Reuters, she said: "I don’t feel urgent that we have to decide with a limited set of information."
She added that the Fed has the time it needs. In her view, reacting when there is time to make a good decision would be imprudent, according to investingLive's account of the interview.
Gasoline drives headline inflation
Her comments came on the day of September consumer price data, which showed inflation at 3.7% from a year earlier, above expectations and well over the Fed's 2% goal. Daly said the figures showed gasoline prices driving headline inflation, while core inflation remained sticky, as she had expected.
Daly also said the risks of inflation staying above target remain elevated. A stable labor market, she added, lets the Fed concentrate on price stability.
Where other officials stand
Earlier on Wednesday, Chicago Fed President Austan Goolsbee called the CPI data discouraging, according to investingLive. The Fed raised its target range by a quarter point to 3.75% to 4% in September, and signaled one more increase this year.
Most officials have pointed to December rather than October as the likelier timing, investingLive reported, and Daly's comments fit that view.
Sources: Reuters via Investing.com, investingLive
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