Financial Associated Press, October 6 (Editor Zhao Hao) On Wednesday (October 5) local time, San Francisco Fed President Mary Daly said that the threshold for the Fed to slow the pace of aggressive interest rate hikes is high, and the central bank The rhythm of 75 basis points per rate hike is likely to continue.
The most recent Fed interest rate meeting is scheduled for November 1-2. After the meeting (02:00 am Beijing time on November 3), the latest interest rate resolution and policy statement will be announced. Half an hour later, the chairman of the Federal Reserve will announce Powell will also speak at a monetary policy news conference.
Daly said in an interview that she was closely watching key economic data that could affect the meeting. “Our policy is built on the data. We only downshift when the data shows what we want to see.” .”
“If the data doesn’t show that, then we’re going to have to continue what we’re doing.” She also pointed out that the latest U.S. core inflation rate is still rising, hindering the central bank from slowing the pace of monetary tightening.
Data released on September 13 showed that excluding food and energy rose 6.3% year-on-year, above market expectations of 6.1% and July’s 5.9%. The September CPI report will be released next week, while the most important September non-farm payroll report on employment will be released this Friday.
“The Fed needs to have Americans’ trust that we are resolute in our mission to lower inflation,” Daly said, noting that if U.S. consumers see inflation still rising, the Fed has no reason to “downshift” tightening policy. .
(Federal funds rate source: TRADING ECONOMICS)
Year-to-date, the Fed has raised interest rates by 300 basis points, and in the latest dot-plot chart conveyed the signal that “the rate hike cycle is still 150 basis points away from the end”. However, recently, the market has seen a number of US economic indicators weakening one after another, and began to suspect that the central bank is “bluffing”, and there are some expectations that “the interest rate may be cut next year”.
In this regard, Daly said that such expectations are wrong, “this is not going to happen”. And reiterated the central bank’s goal of ensuring inflation returns to 2%, “Policymakers’ goal is to raise interest rates into the ‘restrictive territory’ and stay there for a while until inflation is seen materially returning to 2%.”
Daly said the Fed will “stay the course” until the job is done. Financial markets are also a focus for the central bank, she added, but there has been no level of confusion that would affect the path of tightening.