Mary Daly, Governor of the Federal Reserve Bank of San Francisco, said that the Federal Reserve may begin to reduce asset purchases later this year or early 2022.
“I'm looking at factors such as the continued progress of the labor market, the continued control of the COVID-19 pandemic, and the increase in vaccination rates. These are the most basic factors we use to judge the economy on the scale of substantial progress,” Daly said in an interview with PBS on Wednesday. “I think one model prediction that is most likely to happen is that by the end of this year or the beginning of next year, we will act on assets to reduce the size of asset purchases.”
Speaking about the Delta variant, Daly said that economic activity across the country is beginning to be suppressed, and “our economic growth rate will definitely slow down.” Looking at it now, the spread of this strain will not derail the recovery, but it will disrupt the recovery of the global economy and put resistance on the US.
Daly said that the sector of the economy most affected by the reopening experienced a surge in inflation. The supply-demand imbalance will eventually resolve itself.
Daly has the right to vote in this year's FOMC.