(Reuters) -San Francisco Federal Reserve Bank President Mary Daly on Friday called out the elevated uncertainties around the economic outlook, but said that with the economy solid and short-term borrowing costs “in a good place,” the U.S. central bank does not need to make any rushed moves.
“Economic research will tell you that uncertainty is a source of demand restraint,” Daly said in a post on LinkedIn. “We are also getting some mixed signals from markets. From a monetary policy perspective, all of that is a reason to be careful and deliberate.”
The remarks come at the end of a tumultuous week on the economic policy front and some fresh signs in economic data that the economy may be weakening.
The Trump administration doubled tariffs on Chinese goods to 20% and put 25% tariffs on Mexico and Canadian goods, and then gave a one-month reprieve.
The Labor Department reported a broad measure of unemployment surged to near a 3-1/2-year high last month as the ranks of part-time workers swelled. Markets boosted bets the Fed will start rate cuts in June and deliver three reductions this year, more than what Fed policymakers had projected in December.
At the same time, inflation worries remain: earlier on Friday Fed Chair Jerome Powell told a research conference in New York that import duties could add to inflation.
Daly said her eye is on the big picture, which includes an overall unemployment rate of 4.1%, which is historically low despite a tick upwards last month, and inflation that has moved towards the Fed’s 2% goal.
“What I am seeing is a resilient economy,” she wrote.
(Reporting by Ann Saphir; Editing by Sandra Maler and Chris Reese)
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