Fed’s Daly: Infrastructure will boost productivity, not inflation

San Francisco Fed President Mary C. Daly pushes back concerns that the infrastructure spending will propel inflation, per Reuters, during her speech late Tuesday.

Read: Fed's Daly calls for central bank patience in the face of high inflation

Key quotes

Running a sustained expansion gives people time to come back to the jobs market.

The decision on interest rates is not about a punch bowl, it's about millions of jobs.

Expect that infrastructure spending will increase growth potential going forward.

US stock market is euphoric.

Uncertainty is high over the next 6 to 9 months, not only for the US economy but also globally.

It's unclear how or if technology will boost productivity growth; investing in human capital is the surer way to get to higher productivity.

FX implications

Although the push for the US stimulus may help improve the market sentiment and can put an immediate floor under the falling Antipodeans, the market’s refrain from rejecting the Fed rate hike concerns can keep the US dollar on the upper hand.

Read: AUD/USD bears brace for fresh monthly low near 0.7300 amid firmer USD