San Francisco Federal Reserve President Mary Daly on Wednesday said she supports getting the US central bank’s benchmark overnight interest rate up to about 2.5 percent by the end of the year, joining what is now a broad consensus at the Fed that it needs to ramp up its fight against 40-year-high inflation.
“Accounting for the risks of being too fast or too slow, I see an expeditious march to neutral by the end of the year as a prudent path,” Daly said in remarks prepared for delivery at the University of Nevada, Las Vegas, noting that most forecasters estimate a “neutral” policy rate to be around 2.5 percent.
“Once accommodation is removed, we need to evaluate the effects – observe how financial conditions adjust, how much inflation recedes, and what more remains to be done to ensure a sustained expansion,” Daly said.
The Fed began raising interest rates last month, and released forecasts that suggested policymakers generally supported a steady series of quarter-percentage-point increases through the end of the year. – Reuters
