The view that the Federal Reserve should continue to aggressively raise interest rates after July was expressed on Wednesday by Fed Chairman Francisco Mary Daly, noting that the time for a “pause” will come when the Federal Reserve reaches its key interest rate around 2.5%.
“We have to bring the interest rate to a neutral level, which I put at around 2.5% in nominal terms. We have to do it without delay,” Daly told CNBC in an interview.
“We need to see real progress on inflation. Otherwise, I think we need to raise interest rates until they reach at least a neutral level and then look at what else needs to be done,” he added.
The minutes of the Fed meeting in May showed that most Federal Reserve officials were in favor of raising interest rates by 0.5% in the June and July meetings, while Daly’s comment suggests that she is in favor of this view. .
With these two increases, by 50 basis points, the Fed interest rate will rise to the range of 1.75% -2%, ie below the level set by Daly as “neutral”, which indicates that the president The San Francisco Fed is seeing a similar rise in interest rates after July, an estimate that is in line with the latest forecasts of analysts, investors and economists.
Source: Capital
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