(Reuters) -San Francisco Federal Reserve Bank President Mary Daly on Friday said it’s a “reasonable” to think that once the Fed policy rate gets to its peak, it will stay there for nearly a year, and added she’s prepared to keep it there longer if needed.
“Everybody has rates holding for ’23,” Daly said in a virtual event at the American Enterprise Institute, referring to interest-rate projections from all 19 Fed policymakers published earlier this week, when they also signaled they will likely need to lift the policy rate to 5.1% in coming months. Markets currently are pricing in rate cuts in the second half of 2023.
Over the past several rate hiking cycles, the Fed has kept interest rates on hold for 11 months on average.
“I think 11 months is a starting point, is a reasonable starting point. But I’m prepared to do more if more is required,” she said, adding that it will be the data that determines exactly how long the Fed will keep rates restrictive.
(Reporting by Ann Saphir)
