San Francisco Fed President Mary Daly said that the uptick in headline and core inflation rates in January indicates that disinflation momentum is uncertain, and further policy tightening is necessary to combat high inflation.
“After months of decline, headline and core inflation both ticked up in January on a 12-month basis, and the monthly inflation rate rose at its fastest pace in seven months,” Daly said in a speech on Saturday. “This suggests that the disinflation momentum we need is far from certain.”
“It’s clear there is more work to do,” she added. “In order to put this episode of high inflation behind us, further policy tightening, maintained for a longer time, will likely be necessary.”
“Achieving our mandated goals takes time and a broader view,” she said. “As policymakers, we have to respond to an economy that is evolving in real time and prepare for what the economy will look like in the future.”
