Rise in long term yields is a global issue, not a signal for the FedI don't see Fed credibility at riskShort term yields show markets understand Fed reaction functionPolicy is in a good place, watching marketsI don't see evidence calling for pre-emptive rate hikesModal outlook expects inflation shocks will dissipateI was very supportive of Fed's July interest rate holdRecent jobs and inflation data have not changed outlook so farI am looking for signs of more worrying inflation, not seeing that I don't see the job market contributing to inflation right nowFed will stick to its job regardless of Treasury actionFed really has to focus on achieving its inflation targetI don't see any signs of labor market falteringI am not seeing broad inflation spillover from AI buildoutTwo softer prints didn't clear up inflation pictureWe are still in a good place to watch the dataLabor market is stable, my attention is on inflationFed missing its inflation goal by quite a bitSan Francisco Federal Reserve President Mary Daly kept a cautious but broadly dovish tone, arguing that current monetary policy is well positioned and that recent economic data do not justify a shift toward tighter policy.Daly pushed back against concerns that rising long-term Treasury yields should be interpreted as a signal that the Federal Reserve may need to respond with rate hikes. She characterized the increase in longer-dated yields as a global phenomenon rather than a reflection of concerns about Fed policy, adding that short-term yields suggest financial markets continue to understand the central bank's reaction function.Daly said that she doesn't see the Federal Reserve's credibility as being at risk and reiterated that policymakers remain committed to achieving their inflation objective regardless of fiscal developments or Treasury decisions. While acknowledging that inflation remains above target, Daly argued there is currently little evidence to support a pre-emptive tightening of monetary policy. She noted that her baseline expectation remains that inflationary shocks will gradually dissipate over time and said she was strongly supportive of the Federal Reserve's decision to leave interest rates unchanged at its July meeting.She added that recent employment and inflation reports have not materially altered her outlook. Although inflation has shown some softer readings, she cautioned that "two softer prints" are not enough to conclude that price pressures are firmly moving back toward target.Daly also highlighted the resilience of the labor market, stating that she sees no signs of labor market deterioration and does not believe employment conditions are currently contributing to inflationary pressures. Instead, she described the labor market as stable, with her attention focused primarily on inflation developments.Daly added that she is not seeing broad inflationary spillovers from the rapid expansion of artificial intelligence investment and infrastructure spending. While AI-related spending has attracted significant investor attention, she suggested its impact on economy-wide inflation remains limited for now.Daly generally leans on the dovish side and she will be a voter in 2027. This article was written by Giuseppe Dellamotta at investinglive.com.