Fed's Daly Signals No Urgency for October Rate Hike Despite Rising Inflation Risks

San Francisco Federal Reserve President Mary Daly signaled no urgency to raise interest rates at the upcoming October 27-28 meeting, though she noted further hikes are likely needed. The Federal Reserve's policy rate currently stands at 3.75%-4.00% following a hike in September. Daly's remarks follow the September CPI report, where headline inflation accelerated from 3.4% to 3.7% year-over-year, driven by gasoline prices, and core CPI rose to 2.6%. While rate hike expectations initially surged, the market-implied probability of an October rate increase moderated to approximately 40%.