MNI: Inflation Is Far From Healthy Turning Point, Daly Says

Federal Reserve President Mary Daly said Monday the battle against rapid inflation is far from done and she's willing to hike the policy interest rate past 5% if needed.

"We need to focus on really getting the job done," she told reporters after a speech. “It is way too early to call a turning point on inflation.” Any weakness in headline inflation based on gasoline prices could be misleading and core indexes of goods and services prices are a better guide, she said.

“I would be more on the hawkish side” on hikes, adding she doesn’t like that particular word. “Inflation is a regressive tax” that must be contained, she said. Daly referenced comments made after her speech expecting fed funds to go to 5% and it could end up a quarter point above or below depending on data.

“At some point it becomes appropriate to step down the pace,” Daly said of rate hikes, cautioning it’s too soon to lay out a case for that at any given meeting. Tom Barkin at the Richmond Fed has told MNI rates could also move to a higher peak than previously thought even as the pace fades. (See Fed's Barkin-Prices May Force Higher Rates Peak) Stock prices fell after Daly's earlier comments about potentially overdoing rate hikes.