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A hawkish turn from one of the FOMC's most dovish members in SF Fed Pres Mary Daly published in the last hour in a Yahoo Finance interview. In comments since the November FOMC she had put more emphasis on the idea that it was premature to discuss a taper acceleration.

  • But today: "I certainly see a case to be made for speeding it up. We have two important data points that are going to come in before the next meeting. And we'll really inform, I think, our deliberations and certainly my thoughts. ...if things continue to do what they've been doing, then I would completely support an accelerated pace of tapering."
  • Daly describes recent hiring as firing "on all cylinders", which implies that another figure in the 500k area in the upcoming payrolls report (though she also says she's looking at the participation rate and unemp rate), and another elevated CPI print, would prob be enough for her to support an acceleration in the taper at the December meeting.
  • On rates: "I am very open and, in fact, leaning towards that we'll want to raise rates from the zero lower bound at the end of next year....say we lift off and raise a couple of times next year, we still have a lot of accommodation...that's not about restricting the economy. It's just withdrawing the level of accommodation we're offering."
  • Given Daly's a key dove, her comments suggest that the bar to a taper acceleration in December is relatively low, while the new dot plot is likely to pull hikes forward.