Fed’s Daly backs half-percentage-point rate hikes at next meetings

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FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses in San Francisco

(Reuters) – San Francisco Federal Reserve President Mary Daly on Thursday said she backs the plan to hike interest rates laid out by Fed Chair Jerome Powell and would like to see financial conditions tighten further to help bring inflation down.

“Going up in 50-basis-point increments to me makes quite a bit of sense and there’s no reason right now that I see in the economy to pause on doing that in the next couple of meetings,” Daly told Bloomberg News, adding that she expects and wants financial conditions to tighten so as to bring supercharged demand in better line with constrained supply.

The Fed raised its benchmark overnight lending rate last week by half a percentage point, and Powell signaled the central bank would deliver at least two more rate hikes of the same size at its next two policy meetings. Since then, Fed officials have largely voiced public assent to that blueprint.

(Reporting by Ann Saphir; Editing by Paul Simao)

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