Fed's Daly: The time for rate cuts is approaching, and the number of rate cuts this year is more likely to be more than two
PANews reported on August 5th that according to Jinshi, San Francisco Fed President Mary Daly said that given growing evidence of a weakening job market and the lack of signs of persistent tariff inflation, the time for an interest rate cut is near. Speaking about the Fed's decision last week, Daly said, "I'm willing to wait one more cycle, but I can't wait forever." While that doesn't mean a September rate cut is a foregone conclusion, she said, "I would tend to think of every meeting going forward as an immediate meeting to consider policy adjustments." Daly said that two 25 basis point rate cuts this year still appear to be an appropriate readjustment, and the key question is whether rate cuts occur in both September and December, not whether they occur at all. "If inflation picks up and spreads, or if the labor market strengthens, fewer cuts are certainly possible, but more likely, more than two will be necessary," Daly said. "If the labor market appears to be entering a period of weakness and we don't see inflation spillover, we should be prepared for more rate cuts."
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