San Francisco Fed President flags fading tariff effects on prices but highlights tech investment and geopolitics as key inflation drivers.
Federal Reserve Bank of San Francisco President Mary Daly said tariff-driven inflation pressures are beginning to fade, offering a nuanced view on price trends. Her remarks suggest the Fed may maintain a patient stance on rate adjustments as some inflationary forces ease.
Daly noted that while tariffs had a clear impact on inflation, other factors like technology investment and the Middle East conflict remain significant. Earlier comments from Fed Governor Lisa Cook indicated limited room for further disinflation, adding context to Daly’s balanced outlook.
The focus on geopolitical developments, particularly the Middle East, underscores how closely markets are monitoring events for their inflation and energy market implications. Daly’s mention of AI-related capital expenditure as an inflation driver introduces a new angle to Fed commentary.