Daly Downplays Rise in Long-Term Yields, Sees Policy as 'Good Place'

Federal Reserve Bank of San Francisco President Mary Daly emphasized that the rise in long-term Treasury bond yields is a global issue, not just a domestic problem. In an interview with Bloomberg TV, she downplayed the significance of the recent increase in long-term yields.

Daly stated that short-term yields show markets understand the Federal Reserve's reaction function and that policy is 'in a good place.' She also noted that the modal outlook expects inflation pressures to fade and that the recent jobs and inflation data have not changed her outlook so far.

The Fed has been missing its inflation goal by a significant margin, but Daly stressed that she doesn't see the job market contributing to inflation right now. She attributed the 'uncomfortably' stable job market to factors other than AI investment, which she does not believe is driving broader surge in inflation.