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Federal Reserve's Daly Says Recent Inflation Data Good but 'Not There Yet'

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Bloomberg Jul 19 02:14 · 16.8k Views

Federal Reserve Bank of San Francisco President Mary Daly says some incoming inflation data has been “good” but the central bank hasn’t achieved price stability yet. She speaks in a moderated conversation in Dallas.

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Transcript

  • 00:00 We've had some
  • 00:01 really good incoming data,
  • 00:03 but
  • 00:04 even with the incoming data on inflation being positive and a
  • 00:08 good good data after last that the earlier this year,
  • 00:12 we're not there yet.
  • 00:13 We don't have price stability
  • 00:15 right now and we need to be very confident that we're on a sustainable path to achieve it.
  • 00:20 On the other hand, we also have the labor market coming back into balance and we have dual mandate price stability and full employment.
  • 00:27 And as that's come back into balance and if you look at historical measures, I'm a labor economist by training, we have two curves we use the Phillips curve and the beverage curve.
  • 00:36 And by historical experience, we're at this point of inflection in the labor market where additional slowing in the labor market could,
  • 00:43 it's not a, it's not a, a guarantee, but could cause additional increases in the unemployment rate.
  • 00:48 So we have to keep both mandates in our mind.
  • 00:51 But again, we, we have to be fully confident that we're going to be able to deliver on price stability as gently as we can.
  • 00:57 It's a risk to
  • 01:00 act too soon to normalize interest rates and then have inflation stuck below or above rather our target.
  • 01:05 And it's a risk to hold on too long and make the labor market falter in a way that would give people one of the two things they wanted a different one.
  • 01:13 We've got price stability, but fewer jobs.
  • 01:15 Our goal is to really deliver on both and we'll continue to work that way.
  • 01:19 So what that means for interest rate cuts is that we're data dependent.
  • 01:23 We'll have a lot more discussion.
  • 01:24 I go and meet with my colleagues.
  • 01:25 I have three of them in the OR two of them in the room today and one of them virtually
  • 01:30 already.
  • 01:31 And we're not discussing that, we're discussing banking.
  • 01:33 But when we go to the meeting in a couple of weeks, we will absolutely discuss this and craft a path of policy that we know is our best work at trying to deliver on those two mandated goals.