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too-high inflation is main risk, need higher rates -Breaking

by Mike Robinson

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© Reuters. FILE PHOTO (c) Reuters. Mary Daly, chief research officer at San Francisco Federal Reserve Bank, stands in front of the podium as she delivers a speech to the CFA Society, San Francisco, California. U.S. July 10, 2018. REUTERS/Ann Saphir

By Ann Saphir

(Reuters) – Mary Daly, President of San Francisco Federal Reserve Bank said Tuesday that she thinks too high inflation is the main risk to the economy. This could be worsened by Russia’s invasion in Ukraine and China’s clampdown on COVID-19 further disrupting supply chains.

Daly stated that it was time to eliminate accommodation at the Brookings Institution virtual event. He suggested “marching” rates higher to and possibly above a neutral level in order to control inflation and better anchor inflation expectations. “I am already focused on making sure that this doesn’t become embedded so we don’t see longer-term inflation expectation drift higher.”

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