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The Fed’s Daly spoke on CNBC about the jobs report, wages and inflation.
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Job report good news
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Wage growth isn’t booming
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Real wages are falling
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Feel hopeful when think about American workforce
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On inflation, would like confidence to be higher
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High inflation for too long
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inflation has to be number 1 priority.
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Strong labor market gives Fed latitude to get job done on inflation. Rate hike was right move, also good to be on hold at last meeting.
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Uncertainty and tariffs, war, AI, but inflation is more stubborn than would like.
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Will have to tighten policy further.
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Prepared to raise rates if it is called for
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Thinks the Fed needs to be deliberate
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How much more tightening and when need more information
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The AI trade has to be orderly.
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Quite a bit commitment to AI.
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If they are repressing signals slowing of demand, might see growth come down a little.
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Not worried about substantial decline in growth
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Businesses want inflation to come down.
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Businesses are cautiously optimistic about outlook.
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Full employment looks to be pretty stable.
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When he stepped back from painful volatility, this is a kind of rebalancing that you would hope for.
Analysis
Daly’s message was hawkish. Inflation is her number one priority, and a resilient labor market gives the Fed room to bring it down. She welcomed the jobs report and sees full employment as broadly stable, but she also pointed out that wage growth isn’t booming and real wages are falling. That distinction matters. The jobs market can hold up while inflation still eats into workers’ purchasing power.
On rates, Daly said the hike was the right move and that holding at the last meeting also made sense. She expects further tightening and is prepared to raise rates if warranted, but she wants more information before deciding when to move and how far to go. For traders, the jobs report gives the Fed latitude. The inflation data will help determine when it uses it.
On AI, Daly sees substantial investment commitments and wants the adjustment in the trade to be orderly. If the volatility is signaling softer demand, she sees room for growth to slow a little. Her broader read is that businesses remain cautiously optimistic, employment looks stable, and the economy is going through the kind of rebalancing she would hope to see. That leaves stubborn inflation as the more pressing concern for policy.
Daly is a voting member in 2027.
This article was written by Greg Michalowski at investinglive.com.
