Mary Daly: Future Rate Hikes Depend on Persistence of Inflationary Shocks

Mary Daly, President of the Federal Reserve Bank of San Francisco, stated that the decision on whether to implement further interest rate hikes depends on the persistence of inflationary shocks caused by tariffs, rising oil prices in the Middle East, and AI demand. In an interview with Axios on the 6th, he explained that if the recent inflation is temporary, additional rate hikes may not be necessary; however, if shocks overlap or persist longer than expected, policy responses may change. President Daly also identified changes in tariff policy as a variable that could affect the inflation trajectory, warning that if additional tariffs are imposed, new shocks could compound the existing ones. He mentioned that the increasing demand for AI-related semiconductors could heighten inflationary pressures, and if this demand continues, the inflationary shocks could become prolonged. He supported the Fed's rate hike last month but noted that he does not have voting rights in this year's FOMC rate decisions.

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