Fed's Daly Emphasizes No Change to Dual Mandate Goals, Open to New Economic Assessment Methods

On July 2, Fed's Daly stated that inflation is expected to begin slowing down, but there is significant uncertainty regarding the economic outlook. Speaking at an event hosted by the Bank of Spain in Santander, Daly said, 'We continue to maintain policy at a slightly restrictive level, so inflation should decline.' Rising tariffs and oil prices after the U.S. went to war with Iran this spring have pushed inflation higher. Daly expressed appreciation for the easing momentum in oil prices following a ceasefire agreement between the U.S. and Iran, calling it a 'hope for relief,' but warned that it remains unclear how the economy will evolve. Daly outlined various scenarios that may require the Fed to respond differently and indicated that the Fed may need to take a more proactive approach to persistent inflation. She also noted her openness to adopting different and novel methods to assess the economy, but emphasized that it is crucial for the Fed's credibility to maintain its dual mandate of promoting maximum employment and stable prices.
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