San Francisco Fed Pres. Daly is speaking:
- US economic momentum continues to surprise
- There is more we need to do to raise rates
- We need to be data dependent to make policy
- Risks have become more balanced
- Need for two more rate hikes this year to lower high inflation amidst a robust labor market.
- These rate hikes are required to bring inflation back to the Fed's 2% goal.
- The precise number of rate hikes may be adjusted based on economic data, and more or fewer hikes may be needed.
- The risk of underacting continues to outweigh the risk of overacting, but these risks are becoming more balanced.
- The Fed should increase rates more slowly than last year to evaluate the economy's response.
- To assess economic progress, she looks at hard data like monthly job gains but also conducts surveys and personal data collection, including interviewing shoppers at large retailers.
- Shoppers report having ample work, but their primary challenge is rapidly rising prices, which diminish their purchasing power.
- Aims to avoid causing damage to the labor market with excessive rate increases, referencing a conversation with a young man who worries about rapidly rising prices and job security.