Fed’s Daly Says Inflation Still High, Long-Run Rates Likely Above 3%

San Francisco Federal Reserve President Mary Daly said the central bank has "more work to do" to restore price stability, even as the U.S. economy posts solid growth and a strong labor market. Speaking in a Bloomberg Television interview on Thursday, Daly noted that businesses remain optimistic and economic momentum has not stalled. Daly described current monetary policy as restrictive and "in a good place," but cautioned that inflation has yet to return to target. She added that the level at which interest rates ultimately settle will be "3% or higher," above the pre-pandemic estimate of the neutral rate, underscoring expectations that borrowing costs are likely to remain elevated for an extended period.