Key insights
- Daly reiterated the Fed's commitment to 2% inflation, noting current policy as 'slightly restrictive'. She downplayed the impact of energy prices on long-term inflation expectations. The comments suggest a cautious approach, but offer little new information, resulting in a slightly bearish signal for equities as restrictive policy continues.
May 7 (Reuters) - San Francisco Federal Reserve President Mary Daly on Thursday said she was committed to returning inflation to the Fed’s 2% target, adding that there’s no indication yet that the surge in energy prices is driving medium- or longer-term inflation expectations higher, Bloomberg News reported.
Speaking in an interview with Bloomberg, she said the phrasing of the policy statement is less important than the actions of the Fed’s rate-setting committee.
She told Bloomberg the monetary policy is “slightly restrictive” and would put downward pressure on inflation should the U.S. war in Iran resolve.