The Fed's Daly (non-voting member): We are closer to our destination

<p>San Francisco Fed Pres. Mary Daly is a speaking (nonvoting member):</p><ul><li>We stood at this week on rates in recognition that we are closer to our destination. </li><li>We are holding rates steady to collect information to see if more is necessary.</li><li>Holding rates this week doesn't predict what we will do next.</li><li>We need to go at a slower pace.</li><li>We've had a good set of data in last few months, inflation is coming down.</li><li>Labor market is gradually adjusting.</li><li>Unequivocally good news that inflation is coming down, and labor market adjusting gradually.</li><li>I'm not ready to declare victory.</li><li>We will not be satisfied until we are confident inflation is on a path back to stability.</li><li>We want to bring inflation to 2% as gently as we can.</li><li>We do not know if we need to hold rates here or do more.</li><li>Patience is a prudent strategy.</li><li>US economy has a lot of momentum</li><li>Labor market is still not in balance, but it is slowing and is a good sign for the economy.</li><li>Part of improvement on inflation has come from supply-side.</li><li>Demand is also slowing, creating opportunity for the terrific relief of inflation to come down</li><li>Banks are tightening credit, but that's what we want banks to do to get drop in inflation that we need</li><li>The banking system is safe</li><li>Generative AR is small right now in the scheme of things</li><li>Generative AI could improve productivity, could also be disruptive, still early to know</li><li>Committed to bring inflation down.</li><li>Watching the rising energy prices, it's a hardship for families.</li><li>Also watching the sticky nonhousing services inflation.</li><li>It is unlikely that we will be at 2% inflation in 2024</li><li>I am completely unwilling to entertain an increase of 2% inflation target</li><li>Should not rule out risks, but the economy is proving the risk of stagflation to be less important.</li><li>Even if there is a government shutdown we are prepared to continue to do or work and achieve our goals</li><li>We are seeing firms' expected wage growth moderating</li><li>We will be watching if energy price increases push up short run inflation expectations.</li><li>Right now I have no indication that inflation expectations are rising.</li><li>Credit card debt, delinquencies are starting to rise, but still at very low levels relative to the past.</li></ul><p>Fed's Daly is not a voting member. Her comments are positive for inflation and for soft landing, but she at the same time hedges herself. </p>

This article was written by Greg Michalowski at www.forexlive.com.