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San Francisco Federal Reserve Bank President Mary Daly said on Sunday that US Central Bank He will raise interest rates “absolutely” by half a percent in September in an effort to bring down steep inflation.
Daly appeared on CBS’ ‘Face the Nation’, saying Americans are struggling for it Inflation reached 9.1% – the highest level since 1981 – while wage growth is not rising as fast.
“Americans are losing steam every day, so the focus should be on lowering inflation,” Daly said.
The potential rate hike comes as the US economy teeters on the brink of recession.
Mary Daly, president of the San Francisco Fed, promised struggling Americans that the Fed was “far from done” in working to bring down inflation. (David Paul Morris/Bloomberg via Getty Images/Getty Images)
The Ministry of Commerce reported last week that GDP shrank 0.9% in the second quarter after declining 1.9% during the first three months of the year.
However, Daly said she does not see inflation as an integral part of the economy, which she says has shown signs of slowing.
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“What I see is that supply and demand are out of balance. About 50% of the excess inflation we’re seeing is related to demand and 50% to supply,” she said.
Daly said she thinks the Fed is in a great position to cut demand, and that they are already seeing signs of cooling in housing market And in investments.
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“So I’m seeing signs that the economy is cooling, and it’s just going to take a while for the interest rate adjustments we’ve made to work its way up,” Daly said. “And we’re still far from done, that’s our promise to the American people.”
