San Francisco Fed President Daly stated that, given the increasing evidence that the job market is weakening and no signs indicating that tariff inflation persists, the timing for a rate cut is approaching. Daly mentioned regarding the Federal Reserve's decision last week, "I would be willing to wait another cycle, but I cannot wait forever." Although this does not mean that a rate cut in September is a certainty, she said, "I would tend to think that every upcoming meeting is a meeting to consider policy adjustments." Daly noted that two rate cuts of 25 basis points each within the year still seem to be an appropriate recalibration, emphasizing whether cuts will occur in both September and December, rather than whether a cut will happen at all. Daly stated, "If inflation rebounds and spreads, or if the labor market heats up, then certainly there could be fewer than two rate cuts, but it is more likely that we will have to make more than two cuts. If the labor market appears to be entering a weak phase and we do not see the spillover effects of inflation, we should be prepared for more rate cuts."
