SAN FRANCISCO (Reuters) - San Francisco Federal Reserve Bank President Mary Daly on Tuesday said she supports the Fed’s current policy of waiting to adjust its short-term interest-rate policy until the economic data makes it clear whether what is needed is a rate hike or a rate cut.
“Patience is where I’m at right now,” Daly told reporters after a speech at the Commonwealth Club in San Francisco. “That’s where I am going to stay until the data suggests we go one way or another way.”
Daly had earlier warned that the Fed’s years-long undershoot on its 2-percent inflation target could erode the public’s trust in the central bank. But speaking later to reporters, she expressed confidence that inflation will eventually rise, though it is taking longer than she had expected.
“Employers are raising wages, gradually... people were raising prices... it’s just taking a longer time than it typically does,” she said. “We really haven’t seen much cyclical inflation... that’s part of what feeds into my patient strategy.”
Reporting by Ann Saphir; Editing by Dan Grebler