🔥Federal Reserve’s Daly: Before CPI data release, high inflation needs caution; rate cuts are possible but depend on oil prices and the conflict

On April 10, Federal Reserve official Daly said that before the oil price shock, the U.S. had already been working to tackle inflation, and now it needs more time. If the Iran conflict is resolved quickly and oil prices fall, rate cuts “are not impossible”; if inflation remains higher than expected for a longer period, the Federal Reserve will stand by, until it is confident that the inflation problem has been resolved. She believes the likelihood of rate hikes is lower than that of rate cuts or keeping interest rates unchanged. Daly noted that high oil prices will push up inflation and affect economic growth; price transmission into the economy has already been observed. People are reducing travel due to rising costs, but she emphasized that the current price increases are not fundamental. She believes it is necessary to watch the development of the conflict and how businesses pass on rising prices; the real issue is whether a ceasefire can be sustained. If it can, CPI data is not important; high inflation…