Fed’s Daly sees U.S. inflation at 2% goal in five years

FILE PHOTO: San Francisco Federal Reserve President Mary Daly reacts at the Los Angeles World Affairs Council Town Hall, Los Angeles

(Reuters) – San Francisco Federal Reserve President Mary Daly on Wednesday said it’s unlikely inflation will fall to 2% this year, but she does expect it to start dropping and to be at the Fed’s 2% goal in five years.

“There’s just too many supply chain bottlenecks, we’re already through the first quarter, China’s got COVID we’ve got the war in Ukraine, so I don’t think we are going to get 2 this year, but I do think we are going to start coming down,” Daly said after a speech at the University of Nevada in Las Vegas.

Asked about a New York Fed survey that showed households expect inflation to be at 3.7% in three years’ time, she said, “My own view is that we would do policy adjustments so that five years from now we are more on 2% not on something north of 3 (%).”

(Reporting by Ann Saphir, Editing by Franklin Paul)