Fed's Daly on Treasury Buybacks, Inflation, AI Demand

• Fed policy is currently in a good place; no urgent need for preemptive rate hikes or cuts.
• Inflation is driven by a series of shocks (tariffs, oil, AI investment) that are expected to dissipate.
• The labor market is not seen as a primary contributor to inflation, showing 'uncomfortable stability'.
• AI investment is currently a relative demand shock, not broadly spilling over into consumer prices yet.

San Francisco Fed President Mary Daly believes current monetary policy is in a good place, with no urgent need for preemptive rate hikes or cuts. She attributes elevated inflation to a series of shocks, including AI investment, which she expects to dissipate. Daly emphasizes the Fed's focus on price stability and sees no signs of the labor market faltering.