Fed's Daly: Case for a 50 bps rate hike in May is now “complete”, can also make announcement on balance sheet
|San Francisco Fed President and FOMC member Mary Daly on Wednesday said that the case for a 50 bps rate hike in May is now "complete" and that the Fed can also make an announcement on the reduction of its balance sheet at the next meeting, reported Reuters.
Daly said that since the March meeting, she had seen new evidence that the economic expansion in the US is self-sustaining. Raising interest rates to 2.5% this year is not abrupt or surprising, she noted, and there is broad understanding that it is appropriate.
The Fed expects US economic growth to slow below trend, but not tip into recession, and even if it did, it would be mild and short, she noted. Moreover, Daly said that its premature to decide on how restrictive policy may need to get and the Fed will need to evaluate inflation and supply chains.
Finally, Daly called the US labour market "frothy".
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.