The hawkish camp in the Federal Reserve is heating up fast! Daly: Further interest rate hikes are needed to pressure inflation, and companies are planning to raise prices to pass on costs

The Zhitong Finance App learned that San Francisco Federal Reserve Chairman Mary Daly (Mary Daly) said that in order to further reduce inflation, the Fed is likely to need to raise interest rates further — she also revealed that more and more companies are considering raising prices.

“My inclination is that policies need to be tightened further, because you can see that inflationary pressure continues and is no longer limited to those areas most directly affected by tariffs or oil prices,” Daley said at the Stanford Economic Policy Research Institute (SIEPR) event in California on Thursday.

She said she heard more and more companies say they will need to pass on higher investment costs to consumers.

The Federal Reserve completed its first rate hike since 2023 in September to cool down inflation, which has been above the 2% target for more than five consecutive years; at the October meeting, policymakers chose to stay on hold. Daly was not a member of the monetary policy vote this year, but she reiterated her support for both decisions.

Hawk voices are ringing loudly

On the same day, Chicago Federal Reserve Chairman Austan Goolsbee (Austan Goolsbee), Cleveland Federal Reserve Chairman Beth Hammack (Beth Hammack), and Kansas City Federal Reserve Chairman Jeff Schmid (Jeff Schmid) also separately expressed concerns about the stubbornness of inflation.

“My expectation is that we need to shift our policies to a restrictive stance to help reduce inflation,” Hamak said at an event in Columbus, Ohio.

Goulsby proposed a new perspective on the Yahoo Finance program: the boom in artificial intelligence infrastructure construction may be causing economic demand to overheat, which will make it “harder and harder” for the Federal Reserve to reduce inflation.

Data from recent months shows that price pressure is rising in a wide range of categories — far beyond areas directly related to tariffs and energy costs, further fueling the concerns of policymakers.

Recently, a number of policymakers have expressed support for raising interest rates at the next meeting in December. Among them, Director Christopher Waller (Christopher Waller) said that the Federal Reserve should consider raising interest rates by 50 basis points more than normal; Dallas Federal Reserve Chairman Lorie Logan (Lorie Logan) said that interest rates may be raised more frequently this winter.

Hamak said on Thursday that if officials fall behind in fighting inflation, they can consider more aggressive action — but she doesn't think this is necessary right now.

The futures market is currently pricing: the next three sessions — December, January, and March — will raise interest rates by 25 basis points each.

Daly talks about AI: It is indeed driving up prices, but it has not yet become the main cause of inflation

Daly also talked about the impact and prospects of artificial intelligence. She said that AI infrastructure is “unquestionably” driving up price pressure, but since the cost increase is not huge and there is no spillover to other sectors, the impact on overall inflation is currently limited.

“This just shows that current overall inflation is being driven by other variables rather than AI commodities,” Daly said.

At the same time, she reiterated that she is optimistic about the impact of AI in driving faster productivity growth, but it is still too early to tell when this will happen.