San Francisco Federal Reserve Bank President Mary Daly said on Tuesday that ''inflation in the United States could get worse before it gets better, but it will get better.''

In an interview with CNN, Daly also said she doesn't expect the inflation rate to decline to 2% by the end of the year.

She said that she is in favour of raising rates in March but argued that the Fed cannot be overly aggressive on rate increases.

The comments have firmed hawkish sentiment around the Fed and the US dollar stands to benefit in a pre-covid era:

• Post-covid era emerges, but markets already knew it