Fed Has ‘More Work to Do’ to Get Inflation to Goal, Fed’s Daly Says

 Fed has "more work to do" to get inflation to target, Fed's Daly says

 Federal Reserve Bank of San Francisco President Mary Daly said the U.S. central bank still has more work to do to control inflation, even as data for July showed a slight increase in prices.

The consumer price data released earlier Thursday "came largely in line with expectations, and that's good news," Daly, who does not vote on monetary policy this year, said in an interview with Yahoo! Finance. “It's not a data point that says victory is ours. There is still work to do. And the Fed is fully committed to decisively reducing inflation back to its 2% target.

Bureau of Labor Statistics data released earlier showed the core consumer price index -- which excludes the often volatile cost of food and energy -- rose 0.2% for a second month, the smallest sequential gain in more than two years. Overall CPI also increased by 0.2% in July and by 3.2% from a year earlier.

The Fed raised the federal funds rate to a range of 5.25% to 5.5% in July, the highest level in 22 years. The median estimate of Fed officials' latest quarterly projections released in June showed two more rate hikes this year, the first of which took place last month.

The central bank will have other key economic data before its next meeting in September, including the next CPI report. Investors currently do not expect another rate hike this year, based on futures contract prices. Fed officials are divided on whether the central bank should stop raising rates. Philadelphia Fed President Patrick Harker said on Tuesday that policymakers may be able to hold off on raising interest rates if there are no surprises in the economy, although rates will have to remain at current elevated levels for some time. Governor Michelle Bowman reiterated her view on Monday that the Fed may need to raise rates further to fully restore price stability.

Daly said on Thursday that she was dependent on more information and data for the Fed's future moves."I've been very supportive of the rate hikes that we've done, and I'm very supportive of not presuming what we're going to do," she said.

The Federal Reserve System, often referred to as the Fed, plays a vital role in shaping the economic environment of the United States. One of its primary objectives is to keep prices stable and ensure that inflation remains under control. In a recent statement, Mary Daly, president of the Federal Reserve Bank of San Francisco, emphasized that the Fed still has "more work to do" to reach its inflation target. Let's dive into the details of this statement and examine the relative keywords that help us understand the Fed's ongoing efforts.

Inflation Targeting: The Federal Reserve's primary objective is to maintain price stability while promoting sustainable economic growth. This is achieved by targeting a specific rate of inflation, which has typically hovered around 2% in recent years. Daly's statement emphasized that the Fed is actively working to get inflation to that target.

Economic Indicators: The Fed relies on a variety of economic indicators to measure the current state of the economy and the effectiveness of its policies. These indicators include, but are not limited to, the Consumer Price Index (CPI), the Producer Price Index (PPI) and the Price Index of Core Personal Consumption Expenditures (Core PCE). By carefully monitoring these indicators, the Fed can make informed decisions about its monetary policy.

Fed tools: Daly's statement suggests the Fed still has tools at its disposal to influence inflation. These tools primarily revolve around adjusting interest rates and implementing quantitative easing measures. By raising or lowering interest rates, the Fed can affect borrowing costs, which in turn affects consumer spending and business investment, thereby affecting inflation.

Economic recovery: The ongoing post-pandemic economic recovery presents unique challenges for the Federal Reserve. As the economy recovers from the effects of the pandemic, the Fed must carefully balance its efforts to prevent overheating while ensuring that inflation remains on track to reach its target level.

Communication and Transparency: Effective communication by the Fed is essential to manage market expectations and ensure the public understands its goals and strategies. Daly's statement reflects the Fed's commitment to transparency as it openly acknowledges the need for more work to achieve the desired inflation outcome.

A recent statement by Mary Daly, president of the Federal Reserve Bank of San Francisco, underscores the Federal Reserve's continued efforts to meet its inflation target. Acknowledging that there is "more work to do," the Fed reiterates its commitment to maintaining price stability and promoting a healthy economic environment. By carefully monitoring economic indicators, using its available tools and ensuring transparent communication, the Fed tries to navigate the complex economic environment and direct inflation to the target level. As we continue to monitor the Fed's actions, it is essential to stay informed about these developments to understand the broader implications for the US economy and financial markets.

Federal Reserve President Mary Daly recently emphasized the central bank's determination to meet its inflation target. In a recent statement, it emphasized continued efforts to steer the economy toward the desired level of inflation. Let's dive into the key takeaways from Daly's remarks and examine the strategies the Fed is using to achieve its inflation target. d's Daly, inflation target, Federal Reserve, central bank, inflation target. Inflation Challenge:

Daly acknowledged that while progress has been made, the Federal Reserve acknowledges that "more needs to be done" to achieve the desired inflation target. This recognition underscores the central bank's commitment to supporting a healthy rate of inflation that supports economic growth while maintaining stability. inflation, progress, Federal Reserve, inflation target.

 A data-driven approach:

Daly reiterated that the Fed's decisions are based on data. The central bank closely monitors economic indicators, including employment, consumer spending and market trends, to gauge the trajectory of inflation. This proactive approach allows the Fed to make timely adjustments to its monetary policy. data driven, economic indicators, employment, consumer spending, monetary policy. Law of Settlement:

The challenge for the Fed is to strike the right balance. Its aim is to avoid uncontrolled inflation that erodes purchasing power, but also to prevent deflationary pressures that can hinder economic growth. This balancing act requires careful calibration of interest rates and other policy instruments. equilibrium, inflation, purchasing power, deflationary pressures, economic growth, interest rates, policy instruments. Impact on the economy:

Daly's remarks reflect the Fed's understanding of the critical role inflation plays in the broader economy. A stable rate of inflation can boost consumer and business confidence, leading to increased spending and investment. By achieving an inflation target, the Fed seeks to foster an environment conducive to sustainable economic growth. economy, inflation, consumer confidence, business confidence, spending, investment, sustainable economic growth. Outlook strategy:

Daly's statement demonstrates the Federal Reserve's commitment to transparency and clear communication. This forward-looking approach helps market participants and the public understand the central bank's intentions and promotes a more predictable economic environment. Federal Reserve System, transparency, communication, outlook, market participants, economic environment.

Mary Daly's recent comments underscore the Federal Reserve's determination to achieve its inflation target. While acknowledging the progress made, the central bank is committed to "more work" to steer the economy towards the desired level of inflation. Using a data-driven, balanced and forward-looking approach, the Fed aims to create a stable economic environment that benefits consumers, businesses and the broader economy. Federal Reserve, inflation target, economic environment, data-driven, stable, consumers, businesses.