https://youtu.be/aQG7EOElBQg
San Francisco Federal Reserve Bank President Mary Daly stated on Monday that the additional monetary tightening could be “needed” this year, stressing that it is premarture to declare victory on achieving balance between demand and supply. “It’s a very reasonable projection to say that a couple more [rate hikes] will be necessary,” Daly emphasized. The risk of doing too little versus too much on rates is greater, she emphasized, but added that slowing the pace of rate increases could be “appropriate.” “There are longer lags than we assumed,” Daly noted in an event hosted by the Brookings Institution, adding that the Federal Reserve underestimated the “underlying momentum” of the United States economy.
Mester: Fed needs to raise rates further
Cleveland Federal Reserve Bank President Loretta Mester argued Monday that the US Federal Reserve needs to hike interest rates further because inflation is widely expected to be running above the Fed’s target for four years. “In order to ensure that inflation is on a sustainable and timely path back to 2%, my view is that the funds rate will need to move up somewhat further from its current level and then hold there for a while as we accumulate more inflation on how the economy is evolving,” Mester told a gathering at the University of California San Diego. Mester’s views come after the bank kept the official interest rate between 5% and 5.25% at its last meeting in June and ahead of the expected next session at the end of July.