San Francisco Fed President Mary Daly Says Further Rate Hikes May Be Needed, Americans Are on a "High-Inflation Treadmill"
According to CNBC, Mary Daly, president of the Federal Reserve Bank of San Francisco, said on Friday that the Federal Reserve may need to further raise the benchmark interest rate to combat inflation. In an interview, she said that her expectation is that they will have to tighten policy further, and that the exact timing and magnitude are still to be determined.
Daly pointed out that although Americans can still find jobs and continue spending, they are on a "high-inflation treadmill." She said the October employment report was good news for American workers, but wages have failed to keep up with inflation. Average hourly earnings in October rose 3.1% year over year, while the Consumer Price Index (CPI) in September rose 3.7% year over year.
Daly supported the decision last week to keep interest rates unchanged, and also supported September's rate hike. She said that if the economy needs it, she is prepared to take further action, but the pace and timing remain uncertain.
Original source:
Title: Fed's Mary Daly says higher interest rates 'are likely to be needed' in inflation fight Publisher: CNBC Publication date: 2026-11-06 URL: https://www.cnbc.com/2026/11/06/fed-daly-interest-rates-inflation.html Source type: media interview Verification status: Read the full CNBC article for this report and cross-checked with Bloomberg and Reuters; verification date 2026-11-06 Supporting content: Supports all core quotations in the body, employment and inflation data, and policy stance
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San Francisco Fed President Mary Daly said in a CNBC interview on November 6 that the Federal Reserve may need to further raise interest rates to combat inflation. She said that they will have to tighten policy further, but the exact timing and magnitude remain to be determined. Daly supported last week's decision to leave rates unchanged and also supported September's rate hike.
On the labor and inflation path, nonfarm payrolls increased by 165,000 in October and the unemployment rate fell to 4.1%; Daly said this was good news for workers. However, average hourly earnings in October rose 3.1% year over year, below September's CPI of 3.7%, meaning real wages declined. She described Americans as being on a high-inflation treadmill even though they can find jobs and keep spending, and said high inflation has lasted for nearly six years.
Compared with some officials who support gradual rate hikes, Daly clearly said that more rate hikes may be needed, and that she is prepared to act if the economy requires it. The similarity is that both focus on inflation persistence; the key difference is that she sees wages failing to keep up with inflation as the core issue and emphasizes a cautious but gradual approach amid uncertainty. She also mentioned that the revaluation of tech stocks was painful but orderly, but that it does not change expectations for rate hikes.
For the Federal Reserve, Daly's remarks reinforce the possibility of further tightening but do not provide a specific path. For workers, employment is stable but real wages are under pressure. For markets, the remarks came on the same day strong employment data were released and may affect expectations for rate hikes at upcoming meetings, but the final decision still depends on more data.
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Daly said that more rate hikes may be needed, but the exact timing and magnitude remain to be determined.
Employment increased by 165,000 in October and the unemployment rate was 4.1%, but wage growth of 3.1% was below CPI's 3.7%.
She described Americans as being on a "high-inflation treadmill," and said high inflation has lasted for nearly six years.