Fed's Daly (2027 Voter) says main take away from FOMC is everyone agreed to keep rates unchanged, how statement is worded matters less than what the FOMC actually does
- No signs of rising long-term inflation expectations.
- Monetary policy is “slightly restrictive” and would put downward pressure on inflation should the US war in Iran resolve.
- The labour market is stable and isn’t creating inflationary pressures.
Context
Fed's Daly's comments suggest a consensus at the FOMC to maintain rates, indicating stability in monetary policy. Her emphasis on actual actions over wording implies that market expectations might need recalibration if upcoming data diverges from the current outlook. Overall, the absence of inflationary pressures could signal a sustained path for rates, impacting both USD direction and fixed income markets.
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