Mary Daly, president of the Fed San Francisco chapter, issued a noteworthy statement about interest rate cuts.
Daly said monetary policy adjustments will be discussed “quickly” with each future Fed meeting, but noted that there is still great uncertainty about whether interest rate cuts will occur in September.
Daly said “two interest rate cuts this year will still be a proper adjustment,” but he also said he is no longer comfortable with a similar decision following the July decision. He also raised market expectations by saying, “We may not be able to cut interest rates twice, but there is a high possibility that further reductions will be needed.” Commenting on the July decision, Daly said, “I’m going to wait for another cycle, but I can’t wait forever.”
Commenting on the labor market, Daly said that the weaknesses are not clear at this point, but that it is a progressive weakening and that further weakening is undesirable. He also said there was no indication that tariffs had a lasting effect on inflation.
*This is not investment advice.
