Fed’s Daly: Services Inflation Won’t Fall as Expected

The signal here is less about the size of the inflation problem than about the Fed's own expectations being revised in public. Services prices are where policy transmission is slowest, so an official conceding they won't fall as anticipated implies a longer wait before the disinflation story is considered intact. The absence of any figure or timeline leaves the market to infer the magnitude, which tends to amplify sensitivity to the next data prints. Whether other Fed voices echo Daly, and whether services readings actually validate the revision, is the open question.