Inflation persists because COVID does – Fed’s Daly
Federal Reserve Bank of San Francisco President Mary Daly said on Friday that inflation “is not as temporary as we once thought because COVID isn’t either.” She stated current data does not show evidence of a wage-price spiral but that it is “worth watching for.” She added that she is not as worried about an upward inflation spiral as some of her peers due to anchored longer-run inflation expectations.
Daly came out in support of policy adjustment and tapering asset purchases. She said she would prefer gradual rate hikes and “could imagine” adjusting the balance sheet after one or two rate increases.
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