Fed’s Daly says she is open to accelerating pace of bond taper

By Jonnelle Marte

NEW YORK (Reuters) -San Francisco Federal Reserve Bank President Mary Daly said on Wednesday she would be open to accelerating the pace of the central bank’s tapering of asset purchases if inflation remained elevated and jobs growth stayed strong.

“If things continue to do what they’ve been doing, then I would completely support an accelerated pace of tapering,” Daly said during an interview with Yahoo Finance published on Wednesday.

Daly said she was “open” to the idea, but would like to see more economic reports on inflation and hiring and discuss the approach with her Fed colleagues before deciding.

Several Fed officials have said in recent weeks that the central bank should consider withdrawing its support more quickly to be better equipped to address elevated inflation. A readout of the Fed’s November meeting, due out Wednesday afternoon, could provide more details on the depth of unease on inflation among policymakers.

On rate hikes, Daly said she wanted to see how the economy performed in the first and second quarter of next year before deciding. Her outlook is that the Fed will raise rates at the end of 2022, but she noted the central bank’s policy would still be accommodative even after two rate increases.

“I don’t want to be tied down to a number,” Daly said, when asked if she would be sticking to one rate hike next year. “It wouldn’t surprise me at all if it’s one or two by the latter part of next year.”

Policymakers have said they would like to finish tapering the Fed’s asset purchases before raising interest rates. Fed officials are scheduled to meet again on Dec. 14 and 15.

(Reporting by Jonnelle Marte Additional reporting by Lindsay DunsmuirEditing by Mark Potter)