More hawkish Fedspeak from Daly: the markets have gotten ahead of themselves 12:30 $ECON More hawkish Fedspeak from Daly: the markets have gotten ahead of themselves with respect to expectations of rate cuts in 2023, she said in comments at a Reuters event. She reiterated that the FOMC has yet to complete its fight against inflation. Echoing Chair Powell, she said the June SEP projections is a "reasonable guide" and she could see a 3.4% funds rate target by the end of the year. Her estimate of neutral is a little over 3.0%, maybe around 3.1%. She also warned that the Fed will be bringing rates up for longer than 6 months and won't be getting rates down in just a few months. She believes a 3% inflation figure is too high and the FOMC will continue working to bring prices down to the 2% average target. She does not believe the economy is in recession and does not expect anything like the 2008 experience. The Fed continues to aim for a soft landing and she thinks it is achievable. Inflation is currently being driven 50% by demand factors and 50% by supply.
