Fed’s Daly acknowledges that waiting too long could see the Fed lag on rates

July 10, 2025 11:00 pm

Federal Reserve (Fed) Bank of San Francisco President Mary Daly hit newswires on Thursday, following up earlier comments from fellow Fed policymaker Christopher Waller, but taking a more measured approach to discussing the potential for near-term Fed rate cuts.

Key highlights

  • The economy is in a good place, growth and jobs are solid, inflation is easing.
  • The Fed has the ability to restore price stability gently, given the state of the economy.
  • Monetary policy is still restrictive.
  • Labor market is cooling and growth is moderating, but data is not getting meaningfully weaker.
  • Daly doesn’t expect very persistent inflation impact from tariffs.
  • Daly says it’s time to think about adjusting the interest rate.
  • Daly see two cuts as a likely outcome for the Fed.
  • There’s a large amount of uncertainty around policy outlook.
  • The cut rates, Fed needs a continuation of current data trends.
  • Labor market supply and demand is roughly in balance.
  • Economic fundamentals support a move toward lower rates at some point.
  • Real labor market weakening could drive rate cut, but inflation issues could lean the other way.
  • Fed should always have an open mind about changing rates.
  • Thinking about rate cuts during the fall.
  • The latest unemployment claims data were positive.
  • Immigration curbs not yet resulting in wage increases.
  • Businesses and households are in a good position.
  • Seeing some relief that tariffs aren’t as high as they were expected to be.

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