- Daly pushing for 50 at the next meeting
Thursday, 10/11/2022 | 16:24 GMT-0
10/11/2022 | 16:24 GMT-0
This is an important comment from Daly because she’s often a mouthpiece for Powell. At the same time, she’s also talking about a higher terminal rate.
- My own forecast was for Fed funds to peak at 4.90%
- We will probably need to tighten more than the Sept dots plot suggested
- We need to mindful of cumulative tightening and the impact on financial conditions
- My forecast is that inflation is likely above target at the end of 2023
- Likely some more rate hikes in our future
- The real conversation should be about the level at which we hold the interest rate
- About 50% of excess inflation comes from demand, the rest comes from supply
This is in fitting with the Fed pausing somewhere near 5% but with today’s CPI report, the market has shifted the peak to 4.86% from 5.11% last week.