artificial intelligence<\/a> that could shape where interest rates need to be in the future.<\/p>\n“Our price \u200bstability and full employment both seem to be in a good place, policy is in a good place,” Daly said in a live-streamed conversation with former Dallas Fed President Robert Kaplan. “And we have the opportunity now to think through what information is coming in, what impact \u200cwill AI have, how will \u2060productivity evolve, how will demand strength evolve and how should we manage policy going forward.”<\/p>\n
The Fed last month left interest rates in their \u20603.50%-3.75% range, after cutting them by three-quarters of a percentage point last year to shore up what had been a weakening labor market. Daly previously said she supported the decision.<\/p>\n
Businesses are \u200bincreasing their \u200buse of technology, including AI, which should help \u200bease inflation, she said. Meanwhile firms’ \u200cuncertainty over how AI will affect their future staffing needs is keeping a lid on their hiring, she said.<\/p>\n
And while some analysts, and even some Fed policymakers, feel the U.S. economy is headed for an AI-fueled productivity boost that enables faster economic growth without sparking inflation, Daly feels the jury is still out.<\/p>\n
“We don’t want to get too far \u200cahead, to constrain an economy that has a \u200bpossibility of productivity coming down the (pike), but you don’t \u200bwant to be so hopeful on \u200bproductivity that you forget you do have above-target inflation,” she said. “And \u200cthat’s the balance of things that I \u200bthink will really dominate \u200bthis year and next.”<\/p>\n
On Thursday, Daly repeated she is hearing cautious optimism from businesses, and she said she expects inflation, currently above the Fed’s 2% target, “to continue \u200bto come down as \u200cthe labor market remains just steady – not too hot, not too cold – as \u200bhousing services (inflation) keeps coming down and as the tariffs roll through and off.”<\/p>\n
(Reporting \u200bby Ann Saphir; Editing by Chris Reese)<\/p>\n","protected":false},"excerpt":{"rendered":"By Ann Saphir Feb 19 (Reuters) – San Francisco Federal Reserve President Mary Daly on Thursday said she…\n","protected":false},"author":2,"featured_media":480112,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[36],"tags":[28,118065,101,1554,45696,9335,10963],"class_list":{"0":"post-480111","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-dallas-fed","10":"tag-economy","11":"tag-fed","12":"tag-mary-daly","13":"tag-monetary-policy","14":"tag-productivity"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/480111","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/comments?post=480111"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/posts\/480111\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media\/480112"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/media?parent=480111"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/categories?post=480111"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/us\/wp-json\/wp\/v2\/tags?post=480111"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}