San Francisco Fed President Daly: “Further Rate Hikes Are Needed”

【Financial News, New York — Correspondent Lee Byung-chul】 Amid stronger-than-expected U.S. employment figures for October, calls for further interest rate hikes are mounting within the Federal Reserve (Fed). Mary Daly, president of the Federal Reserve Bank of San Francisco, stressed the need for further tightening, saying inflation remains elevated. However, she said the timing and scale of any rate hikes should be decided cautiously after reviewing economic data.
In an interview with CNBC on the 6th (local time), Daly said, “I expect monetary policy will need to be tightened further,” adding, “Exactly when and by how much to tighten has not yet been decided.” She continued, “We need to look at all the incoming economic data and variables together,” and stressed, “We are prepared to raise rates further if economic conditions call for it.”
U.S. employment figures for October, released that day, came in well above market expectations. According to the U.S. Department of Labor, nonfarm payrolls increased by 165,000 in October, nearly three times the market forecast of 59,000. The unemployment rate also fell to 4.1%, reflecting continued strength in the labor market.
Daly called the employment report “good news for American workers,” but also voiced concern about the burden high prices place on households. Average hourly earnings in October rose 3.1% from a year earlier, while the September Consumer Price Index (CPI) inflation rate reached 3.7%. With wage growth failing to keep pace with inflation, workers’ real purchasing power is weakening.
She said, “Americans can still find jobs and continue to spend, but they are on a treadmill of high inflation,” adding that “with high prices persisting for nearly six years, the burden is spreading across the economy.”
She added, “The labor market is stable and solid, but it is not quite booming,” explaining, “This is good news in terms of employment, but it is unclear whether Americans are seeing real economic gains.”
Daly, who will have a vote on next year’s Federal Open Market Committee (FOMC), said she favors a gradual approach to raising interest rates. On the 5th, Richmond Fed President Tom Barkin also supported gradual tightening, saying further rate hikes were needed but that their timing remained uncertain.



[email protected] Correspondent Lee Byung-chul Reporter