Fed's Daly (2027 voter) says underlying US economic fundamentals in a good place

ECONOMY:

  • Underlying US economic fundamentals in a good place
  • Consumers are still spending, businesses are still investing
  • Labour market ‘settling at a good place’
  • Longer-term inflation expectations are anchored

MIDDLE EAST:

  • Question is how long oil will stay elevated, too early to know
  • Says it is important that Fed doesn’t move around as much as news or markets do
  • Says no one likes uncertainty or volatility

NEW FED CHAIR:

  • Daly notes that there has never a huge directional shift with a new Fed chair
  • Says Congress sets the Fed’s mandate, Fed’s job is to execute; Fed has to be apolitical
  • Says there has always been pressure from Administrations on the Fed
Context

Daly’s remarks underscore a positive outlook on the US economy, suggesting stability in consumer spending, business investments, and the labor market. This implies a potential for the Fed to maintain its current rate path, as anchored inflation expectations may support a steadier policy approach, mitigating volatility concerns both domestically and in financial markets.

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