Fed’s Mary Daily says high inflation is “as bad as not having jobs”

Mary Daly, head of research at the Federal Reserve Bank of San Francisco, stands on stage before a speech at the CFA Society in San Francisco, California, USA, July 10, 2018.

Ann Sapphire | Reuters

Concerned about inflation, San Francisco Fed President Mary Daly told a listener on Tuesday that the high cost of living was putting a heavy burden on society.

“I understand that inflation is as bad as not having a job,” he said. Keep it. “

“And our goal is to make sure that people have the same dollar today and are not worried about the value of one dollar tomorrow,” he said during a session hosted by the Native American Finance Officers Association.

The Fed spoke at a time when the Fed was embarking on a policy tightening that would include higher interest rates and a reduction in the amount of bonds held by the central bank. Fed officials hope that changing the ultra-simple policies they introduced during the epidemic will help keep inflation close to their 2% long-term target.

The consumer price index, which measures the basket of dozens of common items, has been running at a rate of 7.9% in the last 12 months, the highest in more than 40 years.

Although he did not specify how fast the Fed would leave, Daly said the effort would have an impact.

“This will increase interest rates, making it harder to finance a car or business,” he said.

“Most Americans, most people, most businesses, hopefully people from tribal countries, you all have confidence that we won’t let it go forever,” he added. “But if you don’t have that confidence, let me give it to you.”

Even with the high rates, Daly said, he doesn’t see the economy entering recession, although he expects things to slow down.

He spoke in support of the US Alliance, but said that maintaining some independence was not the answer.

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