Daly Backs Steady Rates, Says More Inflation Data Needed Before September Decision

San Francisco Federal Reserve President Mary Daly has expressed support for the US central bank's decision to keep interest rates unchanged last week. Speaking at an economics conference in Tokyo, Daly emphasized that policymakers need more evidence before deciding whether inflation requires further action.

The Fed's benchmark interest rate remains at a range of 3.5% to 3.75%, and the central bank cited continued concerns over elevated inflation as the reason for its decision. However, not all Fed officials agree on this stance, with three policymakers dissenting in favor of raising interest rates.

Daly acknowledged that households and businesses could react negatively if inflation begins accelerating again, but expressed confidence that recent supply-related shocks are unlikely to have a lasting effect on prices. She noted that businesses now have limited ability to pass on higher input costs to consumers, reducing the risk of sustained price increases.