Fed’s Daly: Inflation hedge unnecessary, dismisses rate cuts notion

San Francisco Fed President Mary Daly, in an interview with Germany’s Börsen-Zeitung newspaper, expressed confidence in the current state of monetary policy, stating that “policy is in a very good place” as Fed has “raised the key interest rate significantly.”

She further mentioned, “We don’t need an insurance mentality now, where we hedge against rising inflation. We should simply be patient and remain vigilant.”

Regarding future rate adjustments, Daly clarified, “I’m not thinking about rate cuts at all right now.” She emphasized her current focus on evaluating whether the current level of monetary tightening is sufficient to restore price stability.

Daly also provided an optimistic view of the economy, noting, “Our inflation data are improving and our real economy has not stalled.” She added, “I don’t see a recession on the horizon at the moment.”