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Don’t see any signs of lack of economic resiliency, despite above-target inflation
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That’s also a good sign for U.S. economy
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Labor market is stabilized
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Inflation has risen on tariffs, oil price shock
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Oil prices have come down, hope for relief
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U.S. monetary policy is slightly restrictive
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That should help inflation come down
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There is a scenario where the Fed has to fight inflation
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There’s also a scenario where growth doesn’t continue
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Can’t decide right now, can’t give false guidance on rates
Daly was a mouthpiece for Powell previously but isn’t offering much here. Her comments leaned cautiously balanced rather than clearly hawkish. She highlighted strong US investment growth and said she does not see evidence that the economy is losing resilience, even with inflation still running above target. The labor market, in her view, has stabilized, which she framed as a constructive sign for the broader economy. At the same time, she acknowledged that inflation has been lifted by tariffs and the oil-price shock, though lower oil prices could now offer some relief. Her characterization of policy as “slightly restrictive” suggests she believes current rates are exerting some pressure, but not necessarily enough to declare victory on inflation. The key message was optionality: there is one scenario where inflation continues to ease and another where the Fed may need to keep fighting inflation, especially if growth holds up or price pressures persist. By saying officials cannot decide now or offer false guidance, Daly reinforced the Fed’s data-dependent stance and pushed back against firm expectations.
Non-farm payrolls are due at the bottom of the hour and that could alter the picture. The consensus is +110K on headline jobs.
