San Francisco Fed President Daly said that some recent inflation data has been "very good", but the Fed has not yet achieved price stability.
According to Choice Finance, Mary Daly, President of the San Francisco Federal Reserve, said that some recent inflation data has been "very good", but the Fed has not yet achieved price stability. Daly will have voting rights on monetary policy this year, and she reiterated last week's comments that the risks facing the labor market and price stability are better balanced, but the Fed is still committed to its 2% inflation target.
Daly said on Thursday: "We are not there yet. We do not have price stability right now. We need to be very confident that we are on a sustainable path to achieve this goal. We are at an inflection point, and further slowing of the labor market may - not guaranteed - but could lead to further increases in the unemployment rate. So we must keep these two tasks in mind, and we must balance quick action with the cost of mistakes."
In recent weeks, Fed officials have said they are increasingly confident that inflation is on the right track. While most central bankers have not said when they might lower borrowing costs from their 20-year highs, analysts and investors have interpreted it as a signal for action in September.
The Fed's favored inflation indicator has fallen to 2.6%, and the once-overheated labor market has fallen to pre-pandemic levels. While officials continue to describe the labor market as strong, they also say that as job vacancies steadily decline and unemployment rates gradually rise, the job market may be approaching a turning point.
When speaking at a banking funding conference hosted by the Federal Reserve Banks of Dallas and Atlanta, Daly was also asked about the pressure on regional banks last year and the collapse of Silicon Valley banks and other banks. Daly said that the 12 regional reserve banks and the Fed are working to formalize how the heads of local entities convey information about financial institutions to their peers who are responsible for setting regulatory policy.