Daly’s Comments Consistent With What She Has Flagged Previously

Note that the 50bp hike baseline scenario for the September FOMC meeting that San Francisco Fed President Daly alluded to in her FT interview is in line with her recent musings.

• Last week she noted that “50 would be a reasonable thing to do in September” … “if we just see inflation roaring ahead undauntedly, the labor market showing no signs of slowing, then we'll be in a different position where a 75-basis-point increase might be more appropriate. But I go in with the 50 in mind as I look at the data coming in.“
• She came across as marginally more hawkish in her weekend appearance on CBS, highlighting the idea that the Fed is “far from done” re: its fight vs. inflation (an idea she stuck with in the FT interview), highlighting the need to be data-dependent (in the wake of Friday’s strong labour market report) with a focus on taming inflation.
• A reminder that Daly does not regain voting status on the FOMC until ’24.