(Bloomberg) -- Federal Reserve Bank of San Francisco President Mary Daly said policymakers are committed to lowering inflation and are not close to accomplishing that task
“We still have a long way to go,” Daly said Friday at a virtual event hosted by the American Enterprise Institute. “We are far away from our price stability goal.”
The Fed raised rates by half a percentage point at its meeting this week to a target range of 4.25% to 4.5%, a slowdown from the 75-basis-point hikes it implemented at its last four meetings. It also updated quarterly forecasts that showed a higher peak for rates next year of 5.1%, according to the median projection, compared to 4.6% in September.
Inflation has cooled from a 40-year high reached earlier this year, rising 7.1% on a year-over-year basis last month, compared with a 9.1% surge in June. The November monthly gain in consumer prices minus the volatile food and energy sectors was the slowest since August 2021.
“The labor market is out of balance,” Daly said. “If you want a job it’s easy to find one. If you want a worker it’s hard to find one.”
Chair Jerome Powell, in a press conference Wednesday following the Fed’s two-day meeting, welcomed the pullback but said officials want to see substantially more evidence that inflation is on a sustained downward path to the central bank’s 2% target.
Daly said last month that she thought of a 5% terminal rate as “a good starting point,” adding that she is on the more hawkish side of the 19 Federal Open Market Committee participants.
Daly was not a voter on this year’s FOMC and isn’t scheduled to vote next year either.
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