San Francisco Federal Reserve President Mary Daly said on Friday that her "bias" is that the central bank will need to increase its policy rate, particularly with services inflation moving in the wrong direction and some signs of inflation persistence. "We're going to need to, in all likelihood, raise rates; I will deliberate this with my colleagues in December at our meeting and in all future meetings and make the collective decision that we judge is most appropriate for the economy that is evolving," Daly said at a University of Nevada, Las Vegas Center for Business and Economic Research forecast event. "Producers are telling us more and more that they're running out of room to take it out of margins, and they really want to consider passing along this to consumers. So that's the inflationary impulse we want to avoid."