Fed's Daly: With rise in yields, no need for additional tightening


Share:

With the recent rise in US Treasury bond yields, the need to do additional tightening by the Federal Reserve is not there, San Francisco Federal Reserve President Mary Daly said while speaking at the Economic Club of New York on Thursday.

Key quotes

"The economy still has considerable momentum."

"We are a long way from 2% inflation, and a long way from sustainable employment."

"Even with recent slowing in labor market, job growth remains well above what's needed to keep pace with growth."

"It's possible the slowing so far will translate into a steady march toward goals."

"There are real risks in inflation projections."

Will need to see progress on super-core inflation to be confident we are on path to 2%."

"If we continue to see labor market and inflation cooling, we can hold rates steady."

"If financial conditions remain tight, that reduces the need for more action from the Fed. But if cooling in inflation stalls or financial conditions loosen, will need to raise rates further."

"Need to keep an open mind, have optionality on rates."

"I don't see dysfunction in the markets right now."

"Markets have a better sense now, I think, about the Fed's reaction function - that we want to get inflation down to 2%."

"We are not in a wage-price spiral."

"Short-run inflation expectations have come down, and that releases wage pressure."

Market reaction

The US Dollar (USD) stays under modest bearish pressure in the American session. As of writing, the USD Index was down 0.3% on the day at 106.45.

Share: Feed news

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. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content


Follow us on Telegram

Stay updated of all the news

Join Telegram

Recommended content

Editors’ Picks

EUR/USD grinds lower toward 1.0800 as USD extends recovery

EUR/USD grinds lower toward 1.0800 as USD extends recovery

EUR/USD is grinding lower toward 1.0800 in early European morning on Wednesday. The extended recovery in the US Dollar amid a deterioration in risk sentiment is weighing on the pair, as the focus shifts to a data-packed day ahead. 

EUR/USD News

GBP/USD sticks to lows near 1.2650 on sustained US Dollar strength

GBP/USD sticks to lows near 1.2650 on sustained US Dollar strength

GBP/USD is testing lows near 1.2650 in early Europe on Wednesday. The US Dollar is building its recovery gains amid a cautious mood, ignoring negative US Treasury bond yields. Traders refrain from risk-sensitive assets such as the Pound Sterling ahead of key US data, BoE and Fed speak. 

GBP/USD News

Gold buyers refuse to give up ahead of US macro data

Gold buyers refuse to give up ahead of US macro data

Gold price is duplicating the price action seen during Tuesday’s Asian trading, as bulls attempt another comeback early Wednesday. The USD is building on the previous recovery, despite a minor pullback in the US Treasury bond yields, as markets turn tentative ahead of a fresh batch of US GDP and PCE data due later in the day.

Gold News

Bitcoin price extends gains as capital inflows near all-time highs

Bitcoin price extends gains as capital inflows near all-time highs

Bitcoin (BTC) price remains northbound, a status that was invigorated by Monday reports on MicroStrategy and BlackRock. With growing optimism in the market, the risk appetite for investors is also proving elastic. 

Read more

Twiddling thumbs ahead of a US data barrage

Twiddling thumbs ahead of a US data barrage

Traders are keenly aware that the recent components of the Consumer Price Index (CPI) and Producer Price Index (PPI) have influenced the Personal Consumption Expenditures (PCE), and it is unlikely that they will receive an inflation print below the Federal Reserve's target rate.

Read more

Forex MAJORS

Cryptocurrencies

Signatures