New York (CNN Business)San Francisco Federal Reserve Governor Mary Daly said Thursday morning that interest rates would be He said raising either half or three-quarter percentage points in September would be a "reasonable" way to lower inflation.
Daly does not expect the Fed to ease rate hikes any time soon. She predicts it will last until at least 2023, but says it's a good thing in the end, even if Wall Street investors don't agree: "There's a lack of understanding in the market. But consumers seem to understand," she said. “We rely on the Fed not to introduce unnecessary volatility. The worst thing that can happen to us as businesses and consumers is for rates to rise rapidly and then fall. It just creates certainty.”
The raise-and-hold strategy has historically benefited the Fed, she said. Central banks are aggressively trying to warn against the idea of a “big bump interest rate path that will rise very quickly this year and then aggressively lower next year.”
"The job market is strong and inflation is too high," said Daly, who wakes up every morning worried that real wages are falling. 28}
