Mary Daly, president of the Federal Reserve Bank of San Francisco, said the Fed could start scaling back its asset purchases later this year or early 2022.
"I am concerned about the continued progress of the labor market, the continued control of the COVID-19 epidemic, the increase in vaccination rates and other factors, which are the most basic factors for us to judge the economy by the yardstick of substantial progress," Daly said in an interview with PBS on Wednesday. "I think one of the models that is most likely to happen is that by the end of this year or early next year, we will take action on the asset side to reduce the size of asset purchases."
Daly said of the Delta strain that economic activity across the country is beginning to be curbed. "our economic growth is definitely going to slow down," he said. For now, the spread of this strain will not derail the recovery, but it will undermine the global economic recovery and bring resistance to the United States.
Daly said there had been a surge in inflation in the sectors of the economy most affected by the reopening. The imbalance between supply and demand will eventually be resolved on its own.
Daly has the right to vote in this year's FOMC.