She is encouraged by economic progress, but Federal Reserve Bank of San Francisco Governor Mary Daly told CNBC on Tuesday that it was not yet time to change policy.
“We haven’t seen any substantial further progress yet. We are still looking for substantial further progress,” Daily said in a live “Closing Bell” interview. “We saw some very bright spots, some very encouraging news. It gave me hope and I’m bullish on the future, but say the work is done. Is premature. “
The Federal Reserve Board used “substantial further progress” as a benchmark when it began to consider slowing down monthly asset purchases and eventually raising interest rates.
Some central bank officials said last week they believed it was time to start discussing a reduction in the Fed’s monthly bond purchases of at least $ 120 billion. The minutes of the Federal Open Market Committee meeting last month also reflected the feeling that the tapering debate could occur in the coming months.
But Mr Daily said the public should not interpret it as a sign that the Fed is ready to tighten its policies.
“We’re talking about tapering, and that’s what you want us to do. You want to be seen here for a long time,” she said. “But I want to make sure everyone knows that it’s not about doing anything new. Right now, policy is in a very good place. Policy is helping Americans. “
Inflation concerns have fueled the debate over the Fed’s withdrawal of historically easy monetary policy. The consumer price index surged 4.2% in April, but prices for a variety of products, from used cars to gasoline and airline tickets, have also skyrocketed.
Daily said he was “certainly in a temporary camp” when it came to inflation.
She, along with almost all federal colleagues, saw current price pressures as a result of temporary supply bottlenecks, eased as demand returned to normal, and with the economy a year ago caused by a pandemic. We are also looking at the basic effects of the comparison. Economic shutdown.
She also sees “significant momentum” in the economy, but thinks it’s not time for the Fed to withdraw, as 8 million people are still unemployed and the pandemic remains a problem. ..
“Importantly, some of the boom we’re seeing was taken by us to ensure that the bridge is long enough for all Americans to overcome Covid and be fully re-engaged. It is supported by accommodation, “she said. “I think that’s really good news, but it’s too early to declare victory.”
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Federal Reserve Board Daily said the economy is doing well, but it’s “premature” to tighten policy.
Source link Federal Reserve Board Daily said the economy is doing well, but it’s “premature” to tighten policy.