Fed's Daly: 'Dangerous' to pick one metric for full employment

FILE PHOTO: Mary Daly, President of the Federal Reserve Bank of San Francisco, poses after giving a speech on the U.S. economic outlook, in Idaho Falls, Idaho, U.S., November 12 2018. REUTERS/Ann Saphir./File Photo

(Reuters) – San Francisco Federal Reserve President Mary Daly on Thursday said it would be dangerous to pick just one benchmark against which to measure the U.S. central bank’s full employment goal, because it could drive the Fed to raise interest rates before the economy reaches its full potential.

“There’s a danger in computing a number and saying, that means we are there,” Daly said at a Shadow Open Market Committee virtual event, adding that the Fed needs to look at a range of indicators, a “dashboard” of metrics. The Fed last year said it would target maximum, “inclusive” employment, but it does not define that state numerically, as it does with its 2% inflation goal.

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