Federal Reserve's Daly issues a warning about high inflation before CPI data release

CryptoWorld News reports that Federal Reserve official Daly stated that before the oil price shock, the U.S. already had work to do to address inflation, and now that work simply requires more time. If the Iran conflict is resolved quickly and oil prices fall, rate cuts “are not impossible”; but if inflation remains above expectations for a longer period, the Fed will stay on the sidelines until it is confident that inflation has been addressed. She believes the likelihood of rate hikes is lower than rate cuts or holding rates steady. Daly pointed out that sustained high oil prices will mean higher inflation, but will also impact economic growth. She has already seen higher prices transmitting into the economy, with people reducing travel due to concerns over rising costs. However, she emphasized that this is not a fundamental price increase, and it is necessary to observe how the conflict develops and how companies pass on price increases. She noted that the real issue is whether the ceasefire can be maintained; if it can, then CPI data becomes irrelevant. High inflation data itself would not surprise anyone. She stressed that bringing inflation down to 2% is crucial, but doing so at the expense of employment would cause hardship for families. Currently, the risks faced by the Fed in achieving full employment and inflation targets are basically balanced.