San Francisco Fed President Daly Says Further Rate Hikes May Be Needed to Curb Inflation

San Francisco Fed President Mary Daly stated that further interest rate hikes may be necessary to reduce inflation, as more businesses are considering raising prices. Speaking at the Stanford Institute for Economic Policy Research in California, Daly noted that inflation continues to face pressure, which is not limited to industries affected by tariffs or oil prices. She mentioned that an increasing number of businesses are saying they need to pass higher input costs onto consumers. After raising rates in September for the first time in 2023, policymakers kept rates unchanged at the October meeting, as they attempt to cool inflation above the 2% target. Although Daly does not have a vote on monetary policy this year, she reiterated her support for these decisions. Recent data shows rising price pressures across multiple categories, raising concerns among policymakers. Several officials have recently expressed support for a rate hike at the Fed's December meeting, with Fed Governor Christopher Waller suggesting a consideration of a 50 basis point increase, while Dallas Fed President Lorie Logan indicated that more frequent hikes may be needed in the winter. Futures markets expect the Fed to raise rates by 25 basis points at each of the next three meetings.

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