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Fed's Daly says U.S. inflation could get worse before it gets better

Published 02/08/2022, 08:04 PM
Updated 02/08/2022, 08:15 PM
© Reuters. FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses at the bank’s headquarters in San Francisco, California, U.S., July 16, 2019. REUTERS/Ann Saphir

WASHINGTON (Reuters) -High U.S. inflation may get even higher before subsiding in the face of Federal Reserve action and as supply chain strains recede, San Francisco Federal Reserve Bank President Mary Daly said on Tuesday.

"We could have it be worse before it gets better but it is definitely going to get better," Daly told CNN, adding that even so she doesn't expect inflation to have fallen to 2% by the end of the year. Consumer prices rose 7% last year, eating into American paychecks.

The Fed is expected to begin raising interest rates from near-zero levels next month, a move Daly said she supports. When it does, Daly said, the Fed should do neither too little nor be "overly aggressive," mindful that the Fed alone cannot cure inflation that's caused in large part by ongoing pandemic disruption.

Latest comments

The dum woman could not see inflation a challenge until November and now she sees higher inflation possible !! And she continues to be a dove with measures against inflation as compared to the aggressive immediate measures most economists outside Fed think they need to take as of yesterday. All politics ....it's B.S claim that the Fed is independent under Democrats then Republicans
"... inflation that's caused in large part by ongoing pandemic disruption." Keep drink'n that Koolaid, honey.  Fed printing presses running 24/7 have NOTHING to do with inflation, right ?
Nobody apart from the Fed thought it would fall below 2%. Not with labor shortages, supply bottlenecks, energy spikes...plus not to forget the $8 Trillion in money supply sploshing around thanks to Fed Printing presses & $3+ Trillion in extra private debt created as Fed still have interest rates at 0% ......so companies and individuals have been building up as much debt as they could before rates do start increasing.
Yes, we’ve all seen the balance sheet.
She’s partially right that the high inflation is not just a result of Fed printing money…but also the disruption caused by the government’s response to the pandemic. But they got the transitory wrong also; central planners aren’t perfect.
For everything feom covid to inflation same dialogue it will be worse before it get better 🙄Thowing hands in the air without proper planning
Is it not their jobs to handle the inflation before it gets worse? Lol. I understand that they have to let their friends cashout from the stop market before raising their rates but come on Jay, it’s time, we want to keep eating red meat
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