The Fed’s Mary Daly says rate hikes should continue until inflation is tamed

The president of the San Francisco Federal Reserve supports raising interest rates aggressively until inflation comes down.

The central bank policy tightening will likely lead to multiple 50 basis point hikes at coming meetings, then a possible rest to see how the surge in consumer prices is combined with other factors.

She told CNBC that she sees a couple of 50 basis point hikes in the next meeting to get there.

She sees some initial signs of a slowing economy and reduced inflation, but will need to see more progress before the Fed can slow its efforts.

We need to see the data on a slowing economy bringing demand and supply back in balance, and I need to see some real progress on inflation.

The Fed has enacted two rate increases totaling 75 basis points this year, including a 50 basis point increase in May.

Multiple officials have said that the 50 basis point moves are likely to continue for the Fed. Inflation measures such as the consumer price index and Fed's preferred core personal consumption expenditures have come off their recent highs, but are still near levels last seen in the early 1980s.

I don't meet people who think the economy needs help from the Fed. Consumers, businesses and everyday Americans are dependent on us to get inflation back down, and I think these inflation numbers have been going on too long.

She said that the data will dictate how high rates trend, and that the Fed is willing to go far.

The neutral level of the Fed's benchmark borrowing rate is estimated by most officials. It is currently being targeted in a range between 0 and 1%.

The China economic reopening after a Covid-related shutdown will be a factor in whether inflation has peaked. We need to go into restrictive territory if she doesn't see progress.