ChainCatcher news, according to Mary Daly, president of the Federal Reserve Bank of San Francisco, the timing for interest rate cuts is approaching as more evidence suggests that the labor market is weakening and there are no signs of persistent tariff-induced inflation. Daly stated regarding the Federal Reserve's decision last week, "I am willing to wait another cycle, but I cannot wait forever."
Although this does not mean that a rate cut in September is a done deal, she said, "I would tend to think that every meeting going forward is an immediate meeting for considering policy adjustments." Daly noted that two cuts of 25 basis points each within the year still seem like an appropriate recalibration, and the important question is whether cuts will occur in both September and December, rather than if cuts will happen.
Daly said, "If inflation rebounds and spreads, or if the labor market warms up, then cuts could certainly be fewer than two, but more likely we will have to make more than two cuts. If the labor market appears to be entering a weakening phase and we do not see inflation spillover effects, we should be prepared for more cuts."