MNI: Fed's Daly Sets Sights On 'Durable, Sustained Expansion'
Federal Reserve Bank of San Francisco President Mary Daly said Tuesday monetary policy should aim to create conditions for a "durable and sustained expansion" that allows families and businesses to recoup their losses and rebuild incomes and wealth that raise their economic well-being.
The FOMC recalibrated interest rates at its September meeting to recognize the substantial progress in getting inflation back toward 2% and the fact that the labor market has largely normalized, she said in remarks prepared for a New York University talk.
"Making these adjustments to match the economy we have is crucial. It prevents the mistake of over-tightening and ensures we are supporting both of our goals," she said.
Policy remains restrictive and the FOMC won't be satisfied until inflation is back at 2%, she said. Though real wages and incomes have been rising, most households are yet to fully make up the earlier losses, she noted.
"Ultimately, we must strive for a world where people aren’t worried about inflation or the economy. A world where people have time to catch up, and then to get ahead."
She made no specific comment on the pace and timing of future interest rate cuts. (See: MNI POLICY: Fed To Scale Back To 25BP As US Outlook Stays Rosy )