Daly Backs Steady Rates, Sees Need for More Inflation Data Before Next Fed Meeting

US Federal Reserve Bank of San Francisco President Mary Daly expressed support for the central bank's decision to keep interest rates unchanged last week. The move, which was not unanimous among Fed officials, left the benchmark rate at a range of 3.5% to 3.75%. Daly acknowledged concerns about how households and businesses might react if inflation accelerates again.

Daly emphasized that policymakers need more evidence before deciding whether inflation requires further action. She noted that recent supply-related shocks are unlikely to have a lasting effect on inflation, citing reduced ability among businesses to pass on higher input costs to consumers.

The Fed's next policy meeting in September is expected to be closely watched by investors, with incoming data likely to play a crucial role in determining the central bank's stance. Daly expressed confidence that recent supply-related shocks are unlikely to have a lasting effect on inflation and suggested that the end of the conflict in the Middle East could help ease one of the key contributors to inflation expectations.