05.08.2025 01:56

Federal Reserve Bank of San Francisco President Mary Daly recently issued a statement regarding potential interest rate reductions, generating considerable market interest. Her comments emphasized the ongoing evaluation of monetary policy, indicating that adjustments will be a key discussion point at every upcoming Federal Open Market Committee (FOMC) meeting. However, she cautioned against certainty, acknowledging the prevailing uncertainty surrounding a September rate cut.

Daly's assessment of appropriate policy included the possibility of two interest rate reductions this year; a stance she now views as less certain given recent economic developments. Crucially, she suggested a more nuanced approach, implying a greater likelihood of multiple rate cuts than previously suggested. This statement, suggesting further reductions beyond an initial cut, elevated market expectations for future monetary easing.

Highlighting her pragmatic approach, Daly expressed her willingness to observe economic trends before committing to further rate cuts, adding the crucial caveat, "I can't wait forever." This suggests a willingness to hold off on further action if economic data doesn't warrant it, implying a data-dependent strategy.

Concerning the labor market, Daly observed a gradual weakening, emphasizing that while the full extent of this trend remains unclear, sustained weakness would be undesirable. Furthermore, she dispelled concerns about lingering inflationary pressures from recent tariffs, stating there's no evidence of a persistent impact on inflation. This assessment offers insight into the Fed's ongoing consideration of multiple economic indicators when determining appropriate policy. *This is not investment advice. Information obtained from internet sources.*