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Mary Daly says more Fed hikes may be needed if shocks persist

Daly linked potential staying power in inflation to tariffs, Middle East oil price pressures, and ongoing AI demand and chip supply bottlenecks.

Reported · Written up by our desk · Central Banks

San Francisco Fed President Mary Daly said she supported the Fed’s September rate hike and left open the possibility of additional hikes depending on whether recent external shocks prove temporary, according to an interview with Axios covered by FXStreet.

Daly noted that if shocks such as tariffs, Middle East-related oil price moves, and AI-linked effects fade with temporary impacts, further tightening may not be necessary.

She also argued that rising AI demand for chips could contribute to inflationary pressures, and that supply bottlenecks similar to those seen after the COVID period helped drive up car prices due to chip shortages.

FXStreet reported Daly’s view that if these factors keep inflation elevated, they could require additional tightening, and she suggested the Fed may watch for shocks to diminish over a one- to three-year window.

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