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 policy
- 50 bps cut was meant to right-size policy, expect additional cuts going forward
- Recent fed rate cut a 'close call'
- I came down strongly in favor of 50 bps cut
- 50 bps cut was what was needed; didn’t want to find out we had overtightened, and taken jobs from people
- Will be data dependent for Fed's November meeting
- So far have not seen anything that would suggest we would not continue to cut rates
- Policy is absolutely still tight
- I don't want to see labor market slow further
- To get a soft landing accomplished we have to adjust policy rate as inflation falls
- Reasonable estimate for the neutral rates is between 2.5 and 5%
- Fed will learn, experientially, where the neutral rate really is
- My own neutral rate estimate is around 3%
- Would want to be open-minded to continue to ease policy if inflation is falling, even if economy is strong
All this emphasis on the neutral rate while the US economy is powering along. Go figure.
-----------
Daly is often perceived as a parrot for Federal Reserve Chair Powell's views.
