(Bloomberg) — Federal Reserve Bank of San Francisco President Mary Daly reiterated there’s no urgency to adjust interest rates, pointing to solid economic growth, a strong labor market and still-elevated inflation.
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Daly said she needs to be confident inflation is heading toward the Fed’s 2% target before reacting. The San Francisco Fed chief, who votes on monetary policy this year, repeated that policy is in a “good place.”
“The worst thing we can do right now is act urgently when urgency isn’t necessary,” Daly said Monday at an event at the Stanford Institute for Economic Policy Research.
“We’re in the ready position; we can respond as the economy evolves,” Daly said. “The labor market’s not giving us any indication it’s faltering, and inflation is still above our target, and we need to be confident it is on path to come down to our target before we would feel the need — and I would feel the need — to react.”
Policymakers have kept rates unchanged in a range of 5.25% to 5.5% since July and have said they’d like to see more evidence that inflation is cooling toward their 2% target before starting to lower borrowing costs.
A report last week showed a key gauge of consumer prices rose more than forecast for a third straight month in March, increasing concern among some economists and policymakers that progress on inflation is stalling out.
“We have to be thoughtful about not getting too confident that the latest sticky inflation is an indication where we’re going forward, and we can’t get too confident that our projection — that inflation will gradually continue to come down — is going to materialize,” Daly said.
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