San Francisco Federal Reserve President Daley said on the 17th that given the uncertainty surrounding the economy and outlook, the Federal Reserve needs “the boldness to wait” and moderate monetary policy adjustments. He recognized that it should be stopped. Photographed in August (2023 Reuters/Ann Saphir)
(Reuters) – San Francisco Federal Reserve President Daley said on Wednesday that given the uncertainty surrounding the economy and outlook, the Federal Reserve needs “the audacity to wait” and that financial He expressed the recognition that policy adjustments should be limited to gradual adjustments.
“The risks are high and the situation appears to be in a period of uncertainty,” Daley said in a speech in Frankfurt, Germany. “We should embrace gradualism in situations of high uncertainty and where the risks to our goals are more balanced,” and “we must hold fast to the idea that patience, careful adjustment, and continuous reassessment will yield better outcomes.” “There is,” he said.
At this point, central banks around the world are focusing on whether interest rates are “sufficiently restrictive” and how long they should maintain that stance.
Furthermore, it is unclear whether U.S. inflation will steadily slow down toward the Fed’s target, and whether the current U.S. economic trend is a “remnant” of the new coronavirus pandemic or a “new normal.” He said he was not sure. He said it was still unclear whether the effects of the Fed’s interest rate hikes to date have been fully realized.
“The risks of making hasty decisions are real,” he said, adding, “Premature declarations of certainty are not just a prediction error, but a policy error.”
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