Daly Says Fed May Need Further Rate Increases

San Francisco Federal Reserve President Mary Daly said further interest-rate increases may be needed to bring inflation down, while stressing that the timing and size of any move will depend on incoming economic data.

Daly made the comments in a Nov. 6 interview. She said she expects the Fed to tighten policy further if the economy calls for it, but officials have not decided when or by how much. Her remarks described her policy outlook, not a decision by the Federal Open Market Committee to raise rates.

The Fed raised its benchmark rate by a quarter percentage point in September, bringing its target range to 3.75% to 4%. The committee left that range unchanged at its October meeting. Daly said she supported both decisions and continues to favor a gradual approach to policy.

Economic figures cited in the interview showed employers added 165,000 jobs in October and the unemployment rate was 4.1%. Average hourly earnings rose 3.1% from a year earlier. September consumer prices were up 3.7% year over year, outpacing wage growth over the periods reported. Daly welcomed the employment gains but said pay was not keeping up with prices and inflation continued to weigh on household finances.