San Francisco Federal Reserve President Mary Daly said Thursday it was premature to declare victory on inflation despite the soft consumer inflation data for July released earlier that morning.
“There’s still more work to do,” Daly said, in an interview on Yahoo Finance.
See: U.S. inflation rate creeps back up, CPI shows, but probably not enough to worry the Fed
Daly said the CPI data was good news for families and businesses and was consistent with inflation gradually coming down.
She said inflation remains the “number-one concern” of people that she talks with.
“It is not a data point that says victory is ours,” Daly said.
Fed officials have said they want to get interest rates high enough to put downward pressure on inflation. The plan is then to leave rates at that level as inflation slowly falls. But the central bank doesn’t know for sure how high interest rates need to go to get inflation back down to its target of 2%. .
Late last month, the Fed hiked its benchmark rate by 25 basis points to a range of 5.25%-5.5%. In June, Fed officials had projected an additional 25 basis point hike before the end of the year.
Daly said it was too soon to say if she would push for another rate hike as soon as the September meeting.
“There’s a lot of time between now and September,” she said.
The central bankers will update their plans when they meet at the end of September. Daly will be a voting member of the Fed’s interest-rate committee next year.
U.S. stocks
DJIA
SPX
were unable to hold onto sharp gains seen just after the July consumer inflation data was released Thursday morning. Some analysts said that Daly’s comments helped fuel the pullback.
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