The Fed: Fed must try to avoid a ‘harsh recession,’ Daly says

by | Sep 29, 2022 | Stock Market

The Federal Reserve does not need to induce a deep recession in order to bring down high inflation, San Francisco Fed President Mary Daly said Thursday. “Inducing a deep recession does not seem warranted by conditions, nor is it necessary to achieve our goals,” Daly said in a speech at Boise State University.

Deep recessions take a heavy toll on people and families, Daly noted. “The more severe the recession, the greater the potential harm,” she said. “Avoiding this kind of harsh recession will not be easy, but we must try.” The Fed has raised its policy rate by 300 basis points since March and has penciled in a few more hikes this year to get the benchmark rate in a range of 4.25%-4.5%. The central bank has also penciled in one more for next year — to a range of 4.5%-4.75%. Many economists think the Fed will overdo the rate hikes and push the economy into a ditch. Daly said the Fed would have to be attentive to the data and recognize the signs that enough has been done. “Successful polic …

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