© Reuters. FILE PHOTO: Mary Daly, President of the Federal Reserve Bank of San Francisco, poses after giving a speech on the U.S. economic outlook, in Idaho Falls, Idaho, U.S., November 12 2018. REUTERS/Ann Saphir
By Ann Saphir
(Reuters) – San Francisco Federal Reserve Bank President Mary Daly said on Friday that recent ‘eye-popping’ inflation readings are driven by supply chain breakdowns and will subside as COVID does, and the Fed’s decision not to raise rates in response is the right one.
“Just because we are standing pat, being patient, is not the same as being asleep,” Daly said. Raising rates now would not solve the global supply-chain issues but could start to bridle growth next year just as inflation pressures are receding and cost the economy both output and jobs, she said.