Fed's Daly Says Americans Stuck on 'Treadmill of High Inflation,' More Rate Hikes Likely

Federal Reserve Bank of San Francisco President Mary Daly said Americans remain on a "treadmill of high inflation" and that additional interest rate increases are likely, according to remarks reported by CNBC. Daly's comments underscore the central bank's concern that price pressures are proving persistent even as economic growth shows signs of strain.

Her warning came as October employment data showed US job growth exceeded expectations despite economic uncertainty. The labor market has settled into what the report described as a "low-hire, low-fire" pattern, with sluggish growth in hiring but few layoffs. That resilience, combined with stubborn inflation, has kept expectations of another rate hike in December firmly in place.

The combination of firm hiring and elevated inflation complicates the outlook for monetary policy. Policymakers have signaled they are prepared to tighten further if inflation does not show sustained progress toward their target. Daly's remarks reinforce that stance, suggesting the Fed is not yet ready to pause its campaign.

For investors, the prospect of additional rate increases implies continued pressure on borrowing costs and asset valuations, with the December policy meeting emerging as the next key checkpoint for markets. The October jobs report, while pointing to a labor market that is cooling gradually rather than contracting sharply, does little to argue for an early pivot. Daly's characterization of inflation as a treadmill suggests the Fed sees little room to ease until price growth decelerates more convincingly.