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 policy50 bps cut was meant
to right-size policy, expect additional cuts going forwardRecent fed rate cut
a ‘close call’I came down strongly
in favor of 50 bps cut50 bps cut was what
was needed; didn’t want to find out we had overtightened, and taken
jobs from peopleWill be data
dependent for Fed’s November meetingSo far have not seen
anything that would suggest we would not continue to cut ratesPolicy is absolutely
still tightI don’t want to see
labor market slow furtherTo get a soft landing accomplished we have to adjust policy rate as inflation fallsReasonable estimate for the neutral rates is between 2.5 and 5%Fed will learn, experientially, where the neutral rate really isMy own neutral rate estimate is around 3%
All this emphasis on the neutral rate while the US economy is powering along. Go figure.
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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.
