Daly Sees More Rate Hikes, Leaves October Open
Mary Daly expects further Fed tightening while leaving October open. For gold holders, waiting can still mean higher rates ahead.
by Graham Ellery3 min read
San Francisco Fed President Mary Daly said further rate increases are probably needed to restrain inflation, while signaling no urgency to act at the October 27-28 meeting, in an October 14 Reuters interview. For your gold holdings, her message keeps the risk of further tightening alive even if the committee waits this month.
The Fed's September 16 statement raised its target range to 3.75%-4%. We covered the argument for taking time after that increase in Bowman Sees No Urgency for Further Rate Action. Daly makes her expectation of further tightening explicit: she called additional adjustments "more likely than not." Both officials see room to wait, so we would be careful about treating Daly's comments as a disagreement over October. Her interview gives you a reason to keep further increases in your investment assumptions.
The BLS's October 14 release put September annual consumer inflation at 3.7%. Gasoline drove the overall increase while underlying inflation did not turn sharply higher, Reuters reported. Daly said inflation risks had increased and the labor market's stability gave the Fed room to focus on price stability. For us, that combination makes the persistence of price pressure the next test. If fuel costs keep reaching other selling prices, the argument for another increase strengthens. If the pressure fades, policymakers have more room to assess the effect of September's move before acting again.
Does waiting give your gold position relief from interest rates? A pause could help if it lowers the real return investors expect from bonds. Gold pays no interest, so a higher real yield increases the income you forgo by holding it. Real yields depend on both nominal yields and expected inflation. If investors expect further tightening while inflation expectations settle, real yields could rise even during a meeting when the Fed leaves its rate unchanged. We would want evidence that those yields are falling before adding bullion solely because an October increase looks less urgent. Daly's comments alone cannot establish that direction.
The dollar adds a separate condition to your metals trade. If the expected US rate path rises relative to rates abroad, the extra interest return can support the dollar. A stronger dollar makes dollar-priced bullion more expensive for buyers whose currencies weaken, potentially restraining demand. Exchange rates also respond to other forces, so we would compare the dollar with real yields before assuming both will favour gold. Bullion can attract buyers seeking protection from inflation even while interest returns compete with it; we would keep those competing influences in view when deciding how much to pay.
We will watch October 16 industrial production and the October 27-28 Fed meeting, first for evidence on activity and then for whether the committee shares Daly's willingness to wait.
Seek the truth and be prepared,
Equedia News
Sources
- Reuters, Daly says rate hikes likely needed, but not urgently, October 14, 2026
- Federal Reserve, FOMC statement, September 16, 2026
- Bureau of Labor Statistics, September 2026 Consumer Price Index, released October 14, 2026
- Equedia News, Bowman Sees No Urgency for Further Rate Action, October 14, 2026
- Federal Reserve, October 2026 calendar, read October 15, 2026
Disclaimer: This letter is for informational and educational purposes only and does not constitute investment advice. Past predictions and performance are not indicative of future results. Please see our full terms of use and disclaimer at equedia.com. We own gold and gold stocks.
