TechFlow, August 5 — According to Jinshi Data, Mary Daly, President of the Federal Reserve Bank of San Francisco, said that with growing evidence showing a weakening labor market and no signs of persistent inflationary impact from tariffs, the time for rate cuts is approaching. Regarding the Fed's decision last week, Daly stated, "I'm willing to wait one more cycle, but I can't wait forever."
While this does not guarantee a rate cut in September, she added, "I would lean toward viewing each upcoming meeting as an immediate opportunity to consider policy adjustments." Daly said that two 25-basis-point rate cuts this year still appear to be an appropriate recalibration. The key question is whether cuts occur in both September and December, not whether cuts will happen at all.
Daly said, "If inflation rebounds and spreads, or if the labor market strengthens, then of course we might deliver fewer than two cuts. But it's more likely that we could end up needing more than two cuts. If the labor market appears to be entering a weak phase and we don't see inflation spillovers, we should be prepared to do more rate cuts."
