Fed’s Daly: Too-high Inflation Is Main Risk, Need Higher Rates

Fed's Daly: Too-high Inflation Is Main Risk, Need Higher Rates

By Ann Saphir

(Reuters) – San Francisco Federal Reserve Bank President Mary Daly said Tuesday she believes the “main risk” to the economy is from too-high inflation that could get worse as Russia’s invasion of Ukraine boosts oil prices and China’s crackdown on COVID-19 further disrupt supply chains.

“It’s time to remove accommodation,” Daly said at a virtual Brookings Institution event, “marching” rates upward to and perhaps above a neutral level to rein in inflation and more strongly anchor inflation expectations. “I’m already focused on let’s make sure this doesn’t get embedded and we see those longer-term inflation expectations drift up.”

(Reporting by Ann Saphir)