“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 in a virtual appearance before the European Economics & Financial Centre
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.”
In September, she said, she had penciled in a top fed funds rate next year of about 4.9%, she said, higher than the median forecast of her colleagues. Given that inflation tends to lag most other economic data and in light of the various headwinds facing the U.S. economy including the slowdown in global growth, “I support a more gradual approach of getting to it so we can be discovering the right rate as we go.”
***Long story short, she is more hawkish than the rest of her colleagues
Leave a Reply