San Francisco Fed President Mary Daly said yesterday that the slowdown in inflation was “goods news”. Yet, “one month does not a victory make.”
“We have to be resolute to bring inflation down; we’re united in that commitment,” she said. “It’s raising the rate and then holding it for a length of time that is sufficient to bring inflation reliably back to 2%.”
“I would rather move a little bit higher and have to come back then to move a little bit less high and to then tell people we’re going to go higher, because at some point it does seep into inflation expectations,” Daly said.
At the same time, she said, “I don’t want to be over tightening to the point where we throw the economy into a sharp recession, but if we are talking about a rate hike on either side, I want to fully get inflation sustainably down to 2% on average.”
