President Daly joined Nick Timiraos, The Wall Street Journal’s chief economics correspondent, to discuss her outlook for the economy, inflation and interest rates in 2023.
President Daly said that as she travels around her district — which spans nine western states and is the Fed system’s largest district both by geography and by the size of its economy — she hears that “people’s own situations feel different than the situations they fear are out there, or that they even see out there.”
Group media Q&A transcript following President Daly’s keynote, “Resolute and Mindful: The Path to Price Stability” at the Orange County Business Council on November 21, 2022.
“Pausing is off the table right now, it’s not even part of the discussion. Right now, the discussion is, rightly, in slowing the pace.”
“If I can do one thing for the public, I would say: stop thinking about pace and start thinking about level.”
“It is important to recognize that high inflation is what we would call a regressive tax. It is affecting the very people who are the most affected by the pandemic and the very people who suffer from inequality already.”
“There’s literally no doubt in my mind that we need to put a more restrictive stance of policy in the economy to further get demand and supply in balance,” she said.
“Of course, as a human, you care about the pain other countries are experiencing — but as a policymaker, I have a single tool,” Mary C. Daly, president of the Federal Reserve Bank of San Francisco, said in an interview on Tuesday. “It’s a blunt tool, even for the U.S. goals of full employment and price stability.”
“We’re data dependent. When the data shows what we need to see, then we will downshift,” Daly said Wednesday in an interview at Bloomberg headquarters in New York.
“The most important thing I want all your listeners to know is that the Fed is never on a preset course, where we’re going to do this no matter what – we always take incoming information.”
“Our No. 1 priority is to get inflation down. American consumers, businesses are suffering with high inflation, which is eroding their lives and livelihoods. That is why we’ve taken a very rapid pace of increases — to bridle the economy, get demand back in line with supply and give relief on the inflation front.”
“My job and the job of all the teams who work with me is we need to get out and talk to people because ultimately the policies we make are for everyone who lives in our communities.”
“We understand that people need jobs, but they also need prices not to rise so dramatically month by month.”
“The job market is strong. Inflation is too high. The Federal Reserve is committed to using its tools to bring the economy back to a sustainable path, where people don’t have to wake up every morning worrying about whether their real wages are eroding.”
“That indignity of inflation is what’s really cruel about inflation — it hurts people who have less, it hurts them more,” Daly said. “And it has that sense that you’re trying as hard as you can and you still can’t make it.”
“There’s good news on the month-to-month data that consumers and business are getting some relief, but inflation remains far too high and not near our price stability goal.”
“I start from the idea that 50 would be a reasonable thing to do in September because I believe I’m seeing evidence in my contact conversations, and in the observations of the world I see, that there are some bright spots for me.”
“We are still resolute and completely united on achieving price stability, which doesn’t mean 9.1% inflation — it means something closer to 2% inflation, so a long way to go.”
“Americans need to know they don’t have to worry about inflation when they wake up in the morning.”
“We have a strong a strong economy, but inflation is too high and that’s what the Federal Reserve is working on – getting inflation down without tripping up the economy and stalling it out.”