Federal Reserve Bank of San Francisco President Mary Daly:
- Risks to fed's mandates getting in more balance
- Minds are open to cutting rates in coming meetings
- Concern is that we will deteriorate from current place of balance in jobs report; we don't see that right now
- July jobs report reflected a lot of temporary layoffs, hurricane effect
- Will be watching carefully to see if next job market report reflects same dynamic, or reverses
- Underneath july jobs report is some reason for confidence we are slowing but not falling off cliff
- Fed will do what it takes to ensure we achieve both goal
- If react to one data point, we would almost always be wrong
- A 'steady in the boat' approach works well
- Policy needs to be pro-active
- We hear the economy is down shifting
- People are getting inflation relief, but still above 2% target
- Not seeing a move to widespread layoffs yet, that would be an early warning sign
Huh. I don't want to whine, but 'widespread layoffs' are not an 'early warning sign', they are a sign you are behind the curve.
More:
- Its very clear that policy is working in the way intended
- The Fed policy rate will need to be adjusted; when and how much depends on the data
- Too early to tell if the job market is slowing, or if there is real weakness
- The Fed is prepared to do what the economy needs when we are clear on what that is; there is a lot more data before the next Fed meeting
- The two Fed mandates are now equally balanced risks
- Fed's reaction function is clear, and market interest rates are already adjusting
- Policy adjustments will be necessary in the coming quarters
- Its extremely important that we don't let the job markets slow so much that it tips into a downturn
- Want to make sure we keep economic momentum
