Federal Reserve Bank of San Francisco President Mary Daly participates in a moderated question-and-answer session at the 2024 WSJ Tech Live:
- Says Fed will continue to adjust policy
- 50 bps cut was meant
to right-size policy, expect additional cuts going forward - Recent fed rate cut
a ‘close call’ - I came down strongly
in favor of 50 bps cut - 50 bps cut was what
was needed; didn’t want to find out we had overtightened, and taken
jobs from people - Will be data
dependent for Fed’s November meeting - So far have not seen
anything that would suggest we would not continue to cut rates - Policy is absolutely
still tight - I don’t want to see
labor market slow further - To get a soft landing accomplished we have to adjust policy rate as inflation falls
- Reasonable estimate for the neutral rates is between 2.5 and 5%
- Fed will learn, experientially, where the neutral rate really is
- My own neutral rate estimate is around 3%
All this emphasis on the neutral rate while the US economy is powering along. Go figure.
———–
Daly is often perceived as a parrot for Federal Reserve Chair Powell’s views.
This article was written by Eamonn Sheridan at www.forexlive.com.
Leave a comment