Fed’s Daly Says Policy Is in Good Place Amid Trade Uncertainty
Federal Reserve Bank of San Francisco Mary Daly said the US central bank can take its time before making any adjustments to interest rates as it waits to see how trade policy changes play out.
“We cut the interest rate by 100 basis points last year. That puts policy in a good place to stay modestly restrictive — keep inflation coming down — but not so restrictive that the economy is vulnerable,” Daly said Tuesday during a moderated discussion at Brigham Young University.
“So, with growth good and policy in a good place, we’ve built the time and the ability to just tread slowly and tread carefully,” she said.
President Donald Trump’s tariffs on US trading partners have prompted analysts to revise down estimates for economic growth this year and boost projections for inflation. Fed Chair Jerome Powell said last week that the impact of new tariffs is likely to be significantly larger than expected, and the US central bank must make sure price increases don’t lead to an ongoing inflation problem.
US stocks have fallen sharply since the April 2 tariffs announcement as investors have priced in rising recession risks.
Source : Bloomberg
