Fed Governor Lael Brainard and San Francisco Fed President Mary Daly both issued comments that showed they envision higher rates and, in the former’s case, an aggressive drawdown of the assets the central bank is holding on its balance sheet.
What made the two officials’ comments more striking is that they are considered to be in the camp of Fed “doves” — meaning that they usually favor low rates and less restrictive policies. That they both see a rather urgent need to tighten underscores how seriously the Fed is taking the threat.
Brainard’s voice carries a little extra heft in that she has been nominated to be vice chair of the FOMC, a position that makes her the top lieutenant for Chairman Jerome Powell.
