Fed’s Daly Says More Rate Hikes Are Likely as Americans Face a “Treadmill of High Inflation”

San Francisco Federal Reserve President Mary Daly said Friday, Nov. 6, that she expects the central bank will need to raise interest rates further to fight inflation, CNBC reported. “My expectation is we’re going to have to tighten policy further,” Daly said in a live interview with CNBC. She said the timing and size of any move remain undecided.

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Daly points to falling real wages

Daly spoke the same day the Bureau of Labor Statistics reported that employers added 165,000 jobs in October, CNBC reported. The unemployment rate edged lower to 4.1%. Job creation was nearly triple the Dow Jones consensus estimate, according to CNBC.

Daly called the report “good news for American workers,” but she said inflation was eroding their gains. Average hourly earnings rose 3.1% from a year earlier in October, while the consumer price index rose 3.7% in September, CNBC reported.

“They see that they can get jobs, they continue to spend. They’re not out of the game, but they are on a treadmill of high inflation,” Daly said. She said inflation has been high “for too long, almost six years.”

Daly said she is not generally concerned about economic growth but is worried about inflation’s persistence. She said real wages are falling because pay is not keeping up with prices.

Where the Fed stands

The Federal Open Market Committee raised its benchmark rate by a quarter percentage point in September, to a target range of 3.75% to 4%, CNBC reported. On Oct. 28, the committee held that range steady, the Fed said in its statement.

The vote was 10-2. Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favor of a quarter-point increase, according to the statement. CNBC described Cook’s dissent as a surprise, noting she had not dissented since joining the board in 2022.

The committee said inflation “remains elevated” and that more information would help it set policy. Daly said she supported holding at the October meeting. “I also think that it was good to be on hold at the last meeting because the world is filled with uncertainty,” she said.

Daly will vote on the committee next year and said she still favors a gradual approach, CNBC reported.

Other officials signal the same direction

Richmond Fed President Thomas Barkin said Thursday, Nov. 5, that inflation was the most important risk for the Fed, FXStreet reported. Barkin said the policy path is straightforward and that a gradual pace of rate increases “makes sense.”

He also said companies remain cautious about hiring “but are not yet firing,” according to FXStreet. CNBC reported that Barkin sees higher rates ahead but is unsure of the timeline.

What to watch

The next major inflation reading arrives Tuesday, when the October consumer price report is due. Forecasts call for annual inflation of 3.9%, up from 3.7%, CNBC reported, citing Trading Economics. The 2-year Treasury yield, which closely tracks Fed rate decisions, stood at 4.5301% early Monday, Nov. 9.

Fed Chair Kevin Warsh disclosed at the October news conference that one 2027 meeting will not include a rate vote, CNBC reported. Follow rate decisions on The Boston Report’s Federal Reserve tracker and the Economics page.

Sources

• CNBC: Americans are on a ‘treadmill of high inflation’ and more rate hikes are likely, Fed’s Daly says
• Federal Reserve: Federal Reserve issues FOMC statement, Oct. 28, 2026
• CNBC: Here are five key takeaways from the Fed rate decision and Warsh news conference
• FXStreet: Fed’s Barkin backs gradual rate hikes as inflation stays too high
• CNBC: Treasury yields steady as investors await more economic data

About the reporter: Elena Park is an AI reporter covering business, markets and the economy for The Boston Report. This article was produced with AI under our editorial policy. Read our AI and media disclosure.