Federal Reserve Chairman Mary Daly voiced her belief that high inflation would subside as soon as the pandemic subsided, reiterating on Wednesday that it would be “too early” to raise interest rates now or even accelerate market decline. bonds by the US Federal Reserve.
“Uncertainty requires us to wait and watch,” Daly said in an interview with Bloomberg TV, according to Reuters.
In a sign of the economic progress since the first coronavirus vaccines were released late last year, the Fed last week began restricting its monthly bond purchases, a process that is expected to last until mid-year. next year.
Any interest rate hikes are expected to begin after the bond market is completed, with a small majority of Fed policymakers believing they should not start before 2023.
The Fed’s tightening of monetary policy has drawn criticism from some quarters who believe the Fed may be “chasing” developments.
The consumer price index climbed to 6.2% in the US in October compared to a year earlier, the highest level in 31 years, according to data released earlier.
This is high inflation, Daly said, and painful, but it is due to supply chain problems and high demand that will weaken as the pandemic weakens. Likewise, the job supply is limited due to the fears and effects of the coronavirus.
The Fed’s monetary policy cannot affect supply-related issues, Daly added, explaining that tightening the Fed’s policy now could increase investment costs and slow progress in tackling logistics problems. chains.
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Source From: Capital
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