SF Fed Pres Daly: The good news on inflation this week is indeed good news

• Saying that we needed to 2 hikes was a way to keep optionality open
• The good news on inflation Inflation Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Inflation is defined as a quantitative measure of the rate in which the average price level of goods and services in an economy or country increases over a period of time. It is the rise in the general level of prices where a given currency effectively buys less than it did in prior periods.In terms of assessing the strength or currencies, and by extension foreign exchange, inflation or measures of it are extremely influential. Inflation stems from the overall creation of money. This money is m Read this Term this week is indeed good news
• To early to say we can declare victory on inflation
• Lags in monetary policy is 12 – 24 months
• There is still cumulative effects of monetary tightening to work its way through the system
• Thought that the banking crisis could be worth 1 to 2 tightenings, but not seeing that impact
• Am mindful that we still have an economy that has a lot of momentum
• We are going to continue to work on rate hikes until we are sure that inflation is on the path to come back down toward 2%
• There is a risk that we over-tighten and a risk that we under-tighten. That is why we are data dependent
• Hard to say wage growth is going to lead inflation down
• Was not aware of problems at Silicon Valley Bank
• If wait until inflation is 2% and have monetary lags, you want to head to a less restrictive policy to adjust for the lags.
• As inflation starts coming down, can start lowering the nominal rate to bring real rates down to neutral levels
• Wants to start heading towards the neutral rate as we approach 2% on inflation
• We are not there yet.
• The standing pad at the June meeting is about slowing the pace of hiking as we start to reach our destination
• A way to slow the path is to skip a meeting
• We don't know a lot of things. WHat is happening to inflation? What are the credit risk? What are the lags?
• The market might be really focused on the CPI yesterday. I have more optionality. Fed should not be declarative.

The interview was wide-ranging but Daly did walk back some of her hawkishness of her 2 more rate hikes comment a few days ago, saying that the keyword is keeping optionality open. She did imply that lowering rates could come before 2% target but still wants to be sure the path is to the downside.