Fed Official Signals Rate Hikes as US Inflation Hits 3.7%
Mary Daly says the Federal Reserve will likely raise interest rates to combat inflation, though no urgent action is planned for the October meeting.
U.S. consumer prices accelerated in September, with the annual inflation rate reaching 3.7% and the Consumer Price Index rising 0.6%. This spike was driven largely by a 9.1% surge in gasoline prices linked to the U.S.-Israeli war with Iran, while core inflation rose 0.3%, exceeding economist expectations.
Mary Daly, President of the San Francisco Federal Reserve, stated that the central bank will likely need to increase short-term interest rates further to combat this inflation. However, she indicated there is no urgent need to act during the October 27-28 meeting, emphasizing that the stability of the labor market allows the Federal Reserve to be deliberate rather than reacting prematurely to risks.
The economic data arrives as President Donald Trump faces declining approval ratings ahead of the November 3 midterm elections, with voters expressing concern over the rising cost of living. While some market speculators have priced the probability of an October rate hike at 34%, Daly maintained that underlying inflation remains sticky without a sharp upward turn.
