Fed's Daly: We are ready to raise rates if inflation breaks out again.

Federal Reserve (Fed) Bank of San Francisco President Mary Daly cautioned markets on Friday, warning that despite data still leaning toward the Fed achieving its infaltion goals, the US central bank will still step in with additional rate hikes if price growth begins to spiral once again.

Key highlights

The labor market remains in a good position and is balanced.

The Fed's previous framework was aimed to confirm that 2% inflation wasn't a cap and to underscore that the Fed won't fight a healthy labor market if inflation is subdued.

We are ready to raise rates if inflation breaks out again.

When asked how the Fed might Respond to policies by the incoming president: preemptive action would more than likely be wrong, the Fed should wait to see actual policies and the net effect.

Global central banking policies are much less synchronized than before.

We are in an uncertain world where it's not clear how quickly inflation will come back to 2%, and how durable labor market strength is. We need a thoughtful and cautious approach.

The Decemeber Fed meeting is really important.