Fed’s Daly: Policy is in a very good place

  • Policy is in a very good place
  • Risk of over tighten and under tightening are balanced
  • News on inflation has been fairly good
  • It is far too early to declare a victory
  • Not ready to say what that next move will be.
  • Policy is significantly restrictive
  • Not sure policy restrictive enough at current settings
  • Need to watch data to drive next rate decision
  • “Data dependent” is about how you putting all the reports together
  • I don’t want to discount that is in a good place for policy
  • I don’t know if we are sufficiently restrictive
  • Unsure if inflation will come down where we need it to
  • Outlook for economy is positive.
  • Should not be surprised about the volatility in the bond market amid uncertain outlook
  • Financial conditions are tighter than they were, they are remaining tight which is helping to bring balance back to the economy
  • If financial conditions ease more Fed would need to take note
  • If inflation doesn’t ebb further we would likely have to tighten again
  • Sufficiently restrictive policy is something that clearly lowers inflation
  • Has open mind about where neutral rates now stand
  • It’s hard to know why yields are rising.
  • Resist temptation to think one thing is driving the economy
  • Anecdotal data important for forward-looking policy decisions
  • Aspiration to achieve a soft landing while controlling inflation
  • For me that aspiration looks like a little bit of low potential growth
  • Does not see economy falling into a deep downturn

Comments from Daly were largely neutral and noncommittal

This article was written by Greg Michalowski at www.forexlive.com. Source