Daly is recently infamous for pulling a quick 180-degree turn on tapering and transitory inflation. She went from dove to hawk in short order and this week Powell indicated that he sent out his tapering message via his deputies. So Daly is more of a mouthpiece for Powell these days, which isn't a great thing for independence but it's good if you want to know what the Chairman is thinking.
- Keeping an open mind about how many hikes next year
- If economy speeds as expected next year, 2-3 hikes would be appropriate
- Even with 2-3 hikes, policy is very accomodative
- Is bullish on US economy
- Expect unemployment to fall below 4% next year
- As economy gets stronger, Fed will do less to support it
- I have adjusted my policy stance
- We understand inflation is problematic and have to respond to that
- Policy is in a good place
- We are not behind the curve on inflation
- Fed will have optionality to raise rates faster or slower than current forecasts