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On CNBC, Mary C.  Daly  is the President and CEO of  the Federal Reserve  Bank of San Francisco  stated that ‘transitory’ isn’t about timing, it’s about what’s driving the increases in inflation.

Key comments and notes

  • Daly says sees no sign that long-term prices are rising in a way that’s continuous.
  • ”House prices are supported by strong economy.”
  • Expects housing prices to moderate as more housing comes online.
  • ”We are talking about talking about tapering.”
  • ”Right now policy is in a very good place”
  • ”We need to be patient.”

Meanwhile, the comments are consistent with the dominant tone at the central bank this week.

Earlier this week, we heard from both Fed Board Governor Lael Brainard and James Bullard, president of the St. Louis Federal Reserve.

Brainard assuaged inflation concerns, saying she expects that price spikes associated with supply bottlenecks and the reopening of the economy to “subside over time.”

Bullard said that while still in the pandemic, it was not the time to talk more about changing the parameters of monetary policy.

The tones were backed by today’s comments from Fed’s Richard Clarida who said the threats to financial stability are manageable and that data continue to support inflation forecasts that are well anchored.  

The US dollar has edged lower on Tuesday to print 89.5350 for a fresh 4-1/2 month lows against a basket of peers in the DXY as officials from the US Federal Reserve reiterated that policy would stay pat calmed fears about inflation forcing  rates  higher.