Fed’s Daly signals potential for more rate hikes amid rising inflation pressures
Federal Reserve President Mary Daly has indicated that inflation pressures are intensifying and firms are increasingly passing higher costs onto consumers, suggesting additional rate hikes might be necessary.
Federal Reserve President Mary Daly has expressed comfort with the Fed's September interest rate increase and signaled that further tightening may be required to combat rising inflation. Her remarks come as firms increasingly pass higher costs onto consumers, intensifying price pressures across the economy.
Current market pricing reflects growing expectations of additional monetary action. The probability of a second rate hike in 2026 has risen to 89.5%, up from 66% just one week ago, according to market data.
Inflation data
Daly's comments follow recent inflation figures showing a 0.4% month-over-month increase in the Consumer Price Index (CPI) for October. This data suggests persistent inflationary trends that continue to challenge the Federal Reserve's efforts to bring inflation back to target levels.
inflation pressures are intensifying and that firms are increasingly passing higher costs onto consumers
Market expectations
Market participants interpret Daly's remarks as an indication that the Federal Reserve will maintain its restrictive policy stance. The central bank's next moves will be closely watched, particularly the December FOMC meeting, which could provide further clarity on the policy path.
Any new inflation data or comments from Federal Reserve officials could significantly influence market expectations and potentially solidify current pricing trends for additional rate increases.
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