Daly Favors Steady Rates Amid Labor Market Vulnerability
Fed President Mary Daly suggests holding rates steady to assess data after a weak jobs report. She cited risks from high inflation and the Iran oil conflict.
San Francisco Federal Reserve President Mary Daly stated on Friday that while a recent weak jobs report in the United States highlights labor market vulnerabilities, it does not mandate an immediate reduction in interest rates. Daly noted that the Federal Reserve faces a complex landscape of two-sided risks, balancing employment concerns against persistent inflation and a recent surge in oil prices linked to the conflict in Iran.
Speaking to CNBC, Daly suggested that maintaining current borrowing costs remains a viable strategy while the central bank evaluates incoming economic indicators. The Fed had previously held rates steady in January following a series of cuts last year.
"There's another alternative which is also a policy alternative, which is to hold them steady while we collect more information."
Market volatility sparked by interest rate uncertainty often affects international industrial suppliers like Oiles Corporation, which track central bank policy for signals on global demand. Daly clarified her position on the current trajectory, indicating that while further tightening is not on the table, the urgency of a response to the labor market is still under deliberation.
"I'm certainly not in a position to think we should be hiking interest rates, but I think there's a real issue about whether we should meet immediately, urgently act on the labor market, or whether we should wait to think through the data.""
