Mary Daly, Interview: CNBC
Pause
”Pausing is off the table right now. It’s not even part of the discussion. I’d say right now the discussion is rightly in slowing the pace and putting the pace discussion in the background, focusing our attention on what is the level of interest rates that will end up being sufficiently restrictive. I really want to turn people back to the statement we released, to Chair Powell’s press conference, which I think just reiterated some of the aspects of the statement that really focused on pace. Pace is the conversation of the first phase of tightening. And that has been completed. We are in a slightly restrictive space by most people’s calculations. Now we’re really talking about the level that is sufficiently restrictive. That means data dependance, extreme data dependance, thinking about the cumulative tightening we’ve already put into the system and of course those lags in monetary policy become really important if you’re trying to gage exactly how you get somewhere without over or under doing it.”
Fed Funds
“Well, let me just say where I think we’re headed. I’ve been a little more on the, we’ll probably have to go higher side. I usually don’t disclose my dots for the SEP, so don’t get used to it, but in September I really thought when I was looking at the economy that the likelihood of we’d have to go to 5.00% was strong enough that I wrote that down. I still think of that as a reasonable ending place for us before we hold. And the holding part is really important, it’s a raise to hold strategy. But if somewhere between 4.75% and 5.25% seems a reasonable place to think about as we go into the next meeting, so that does put it in the line of sight that we would get to the point where we’d raise and hold. And I want to make just one point that isn’t often talked about, when we raise and then hold, over time as we’re holding, monetary policy is becoming tighter as inflation comes down so that’s another factor we’ll have to consider. So, the discussion squarely today is in the idea of how high do we have to go and then it will turn to how long do we have to hold it.”