Huge comment from a dove
When a dove makes a hawkish shift, that's big news.
The tide is clearly shifting towards a quicker taper. She added that it's "too premature" to speed it up today and that they need more data.
Notably, just last week Daly said "I have a strong bias to stick to current taper pace."
We're going to get more data in an hour with the PCE numbers.
That said, inflation isn't going to suddenly shift in the next month so I think it's time to expect shift. The next step will be for a core Fed member to say the same thing.
- If jobs market continues to fire on all cylinders and inflation comes in high again that may support an acceleration of taper
- Says she needs to see more data and discuss with colleagues before deciding on pace of taper
- Says she wants to be data dependent
- Says her business contacts told her bottlenecks might not be resolved until the second half of next year
This is bullish for the US dollar. I think you can now assume Powell is going to make a similar pivot.