(Reuters) – San Francisco Federal Reserve President Mary Daly on Wednesday said that mostly likely the U.S. central bank will be in position to begin to reduce its massive asset-buying program later this year or early next year.
“I’m looking for continued progress in the labor market, continued putting COVID behind us, rising vaccination rates, the things that are so fundamental to us saying that the economy has achieved that metric of substantial further progress,” Daly said in an interview on the PBS NewsHour. “Right now my modal outlook is that we will achieve that metric later this year or early next.”
Fed officials have largely downplayed the impact of the highly transmissible Delta variant on the course of the recovery. Daly was less sanguine.
“If we don’t keep up with it, then it could definitely slow the rate of growth in our economy,” she said, adding that it is already tempering some economic activity. “Right now I don’t expect it to derail the recovery of the United States, but it’s already very seriously interrupting the recoveries in the global economy, and that in itself is a headwind on U.S. growth.”
(Reporting by Ann Saphir in Berkeley, Calif.; Editing by Chris Reese abnd Matthew Lewis)