Fed's Daly: There's a lot more in the pipeline of monetary policy tightening

San Francisco Federal Reserve Bank President Mary Daly said that they had good news on inflation but added that she doesn't want to forecast the end of the tightening cycle, as reported by Reuters.

Key takeaways

"Bank stresses have stabilized."

"We have tools for monetary policy, financial stability and they don't compete with each other."

"I expect inflation to end 2023 a little above 3%."

"Inflation expectations are anchored, allowing us to take a couple of years to bring down inflation."

"Policy tightening is at a point now where we don't expect to continue to raise rates every meeting."

"There is a sense we will get rates up to a level and stay."

"Will look in CPI inflation to see if core services ex-housing are coming down."

"We are getting signs of cooling in labor market, but not there yet."

"There's a lot of uncertainty about how long it takes for rate hikes to impact the economy."

"There's a lot more in the pipeline of monetary policy tightening."

"When credit conditions tighten, it puts brakes on the economy so Fed doesn't have to tighten more."

"Bank lending will contract."

Market reaction

These comments failed to help the US Dollar find demand and the US Dollar Index was last seen losing 0.6% on the day at 101.52.