Daly (Fed): Sudden interest rate hikes could be destabilizing

LAST UPDATE: 19:37

Excessively “abrupt and aggressive” interest rate hikes could be counterproductive to US Federal Reserve targets, San Francisco Federal Reserve Chairman Mary Daly said Sunday, signaling that she is not yet ready to introduce a rate hike. by half a percentage point next month, according to Reuters.

“So I look at the data and I see that it is obvious that we have to withdraw some of the easing measures from the economy, but history tells us with the Fed policy that abrupt and aggressive action can actually have a destabilizing effect on growth itself. and the price stability we’re trying to achieve, “Daly said in an interview with CBS’s” Face The Nation. ”

Daly stressed that the Fed should raise interest rates at the March 15-16 meeting, after which officials should “monitor, measure, be very careful with what they see and then “They raise the next interest rate when it seems like the best time to do it. And that could be the next meeting or it could be a later one.”

Asked how the crisis in Ukraine is playing a role in shaping the thinking of Fed officials amid concerns that Russia could invade “day in and day out,” Daly said her primary economic impact is the degree to which which increases consumer uncertainty.

“Every time you have a geopolitical risk, it creates uncertainty, and Americans already face a lot of uncertainty – uncertainty about when COVID will leave, uncertainty about how the economy is going, so that’s just one more factor,” Daly said. “And uncertainty, as we know it, affects consumer sentiment and ultimately affects consumer demand.”