Fed’s Daly says policy well positioned, can afford patience, urges deliberate calibration

Fed's Daly's Comments

Mary Daly, president of the San Francisco Federal Reserve, stated that the U.S. monetary policy is in a good position to respond to economic shifts. Recent economic data show solid growth, stability in the labor market, and easing inflation. Together, these trends imply the economy is moving closer to balance. Daly mentioned that last year, the Fed cut rates by 75 basis points in response to a slowing labor market and milder inflation. However, she cautioned about lingering uncertainties concerning both inflation and employment, highlighting the need for a measured approach going forward. "We need to be deliberate in calibrating policy," she emphasized. Her remarks precede the Fed's upcoming meeting on January 27-28, where officials are expected to maintain rates in the current range of 3.50%-3.75%. This cautious approach indicates a comfort with holding rates steady while assessing the impacts of prior rate cuts. Moreover, she stressed that decision-making cannot solely rely on data releases; feedback from businesses and households is also crucial for understanding future trends.