© AP Photo / Andrew Harnik
WASHINGTON (Sputnik) - US businesses were already uncertain about the future of inflation and the economy before Thursday’s presidential debate and are unlikely to be confident about either in the near-term, San Francisco Federal Reserve President Mary Daly said on Friday.
“What I'm hearing from CEOs of small, medium and large firms is they already feel uncertain; they've been uncertain for the last year,” Daly said during an appearance on the CNBC network.
“They're uncertain about when inflation is coming down. They’re uncertain about the strength of demand. They're uncertain about the global economy. What they're doing though is they're continuing to do their core work.”
But Daly was quick to add that her perception about the uncertainty faced by US chief executives had more to do with overall inflation and the economy, rather than a political comment on the outcome of the presidential debate. “The job of the Fed is not to speculate or hypothesize,” she added.
In Thursday's debate, President Joe Biden said the economy under his predecessor Donald Trump was in chaos, while his challenger blamed him for the post-pandemic runaway inflation that the Fed is still fighting.
Aside from their bickering over the economy, the two men appeared to leave many Americans unsure of whom to pick for the White House in November’s election, with Biden seeming feeble and too old for the job and Trump refusing to admit to missteps during his 2016-2020 term of office.
Daly said investors and businesses in the country had reasons to be concerned. “We have an economy that still has too high inflation."
The Fed’s target for inflation is a mere 2% per annum. While that was not set in stone, Daly said “if we move the goalpost and say ‘Oh, I'm sorry we changed our mind’ … well, that's [not only] bad for credibility but also bad for the people we serve.”
The Fed’s favorite inflation tracker — the Personal Consumption Expenditures Index (PCE) — grew 2.6% year-on-year in May, retreating from April’s annual expansion of 2.7%, data on Friday showed.
Another key price gauge — the Consumer Price Index — moderated to grow at 3.3% year-on-year in May, from April’s annual expansion of 3.4%.
"I think that we'll continue to see inflation print above 2% potentially through 2025,” Daly said.
Her outlook on inflation suggested that the Fed may not be ready as yet to cut interest rates standing at two-decade highs.
The Fed has kept rates in a range of between 5.25% and 5.5% since July 2023. That is the highest for rates since 2002.
https://sputnikglobe.com/20240628/us-businesses-already-uncertain-of-future-before-biden-trump-debate---feds-daly-1119168480.html
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