San Francisco Fed President DALY said Friday that worsening inflation makes
further Fed rate hikes likely. Core CPI has risen about 0.3% month‑on‑month for
three straight months, above the roughly 0.2% or lower pace consistent with a 2%
inflation target. She flagged services inflation excluding housing as
particularly poor and potentially sticky. Input costs are rising and more
producers say margins can no longer absorb costs and are considering passing
them to consumers. DALY said she will discuss hikes at the December meeting and
future meetings, with decisions collective and data‑dependent. Markets currently
price 25bp hikes at the Dec. 8–9 and Jan. 26–27 meetings. She will watch
consumer spending over the next one to three months, especially holiday demand;
consumption remains resilient overall but some regions show signs of weakening
momentum.
