Fed's Daly: More Rate Hikes Likely Amid Inflation, Wage Gap — SkimNews
Get the Finance newsletter
Daily finance — markets, central banks, M&A, the prints that move money. Free.
- Mary Daly expects the Federal Reserve will need to raise interest rates further, citing persistent inflation and the need to assess incoming economic data before deciding timing and magnitude.
- U.S. labor market added 165,000 jobs in October while the unemployment rate fell to 4.1%, significantly exceeding Wall Street expectations and reinforcing labor market resilience.
- American workers are experiencing falling real wages as average hourly earnings rose 3.1% annually in October, trailing the 3.7% inflation rate and creating a 'treadmill of high inflation,' according to Daly.
- Federal Open Market Committee held rates steady last week after a September hike to 3.75%-4%, with policymakers emphasizing the need for more information before the next move.
- Thomas Barkin of the Richmond Fed also signaled support for future rate hikes, aligning with Daly’s view that tighter policy is likely despite uncertainty around timing.
Why it matters: With inflation still outpacing wage growth and the labor market remaining strong, the Fed faces pressure to hike rates further—delaying relief for borrowers and increasing the risk of overheating the economy if miscalculated. The 165,000 October jobs gain and 4.1% unemployment rate suggest cooling has been uneven, making policy decisions more consequential.
Ask SkimNews
