Fed’s Daly encouraged by falling CPI but warns against declaring end of hikes

  • Recent data showing falling inflation “very, very encouraging”
  • Refused to rule out rate hikes, said they should be “thoughtful, take our time, not rush to judgment and not make declarations”
  • “We have to be bold enough to say ‘we don’t know’ and bold enough to say ‘we need to take the time to do it right’.”
  • “What I worry about is that without a sufficient amount of information about whether we’re really on that disinflationary process that brings us back to 2 [per cent], we have to ‘stop-start’”
  • A stop-start would hurt credibility
  • Indicated little concern about sharp fall in yields recently
  • “None of the concerns that I’m hearing are really about a dire, fall-off-the-cliff economy.”
  • Rate cuts are “not happening for a while”

This isn’t the strongest push-back against the market, which is currently pricing in zero chance of a Fed hike going forward.

This article was written by Adam Button at www.forexlive.com. Source