Fed’s Mary Daly says current interest rates put economy ‘in a good place to weather the storms’

San Francisco Fed President Mary Daly said Wednesday that she did not think the Fed needs to lower interest rates to offset the effects of the coronavirus outbreak or other economic headwinds.

Appearing on CNBC’s “Power Lunch,” Daly said she did not think the outbreak would do anything “material” to the U.S. economy, even with heavy travel restrictions in China potentially denting global growth.

Daly said that while the outbreak may lower global growth, the decreased chances for a hard Brexit and progress in the trade talks between the U.S. and China help to offset that new uncertainty.

“For right now, the way I see it is the cuts we have in place already, the accommodation, puts the U.S. economy in a good place to weather the storms,” Daly told CNBC’s Steve Liesman.

The Federal Reserve lowered its benchmark interest rate three times last year. It now has a target range of between 1.5% and 1.75% for the rate. The Cboe’s FedWatch tool shows that option markets imply that some traders expect rate cuts later in the year.

Daly also echoed some of what Fed Chair Jerome Powell has said in regard to the central bank’s 2% inflation target and the labor market. Powell has said that the target should be a symmetric one and not a ceiling.

Inflation has been persistently below the 2% level during the economic recovery, and Daly said that should allow the Fed to continue to try to increase employment until inflation rises.

“I think we need to learn what full employment in the United States is experientially as opposed to guessing and then stopping short of fully realizing it,” Daly said.

The next meeting of the Federal Open Market Committee is March 17 and 18. Daly is not a voting member of the committee.