The Federal Reserve's meeting in September hadn’t even started, and the powder keg was nearly ignited! Daly of the San Francisco Fed slammed her teacup on the table—cutting 50 basis points? Which idiot came up with that terrible idea? Is this resuscitating the economy or just wanting it to die faster?! The gambling addicts on Wall Street, with their eyes red from excitement, are eagerly waiting for the Fed to act like a fairy godmother, raining down rate cuts like candy, but in Daly’s eyes, they are simply starving lunatics who don’t recognize the scale!
“50 basis points?” Daly's tone during the interview was like that of a grandparent scolding a grandchild, “Once this news breaks, global markets will be scared out of their wits! They’ll think the American job market is heading straight to the crematorium tomorrow!” She was rolling her eyes to the back of her head, “Fragile? About to collapse? What nonsense! The pile of data reports in front of me doesn’t have ‘help’ written on it!” In Daly's view, playing with interest rate cuts like this isn’t saving the market; it’s creating panic and chaos!
Don’t think Daly is a stubborn hard nut. Last month, she was cautious, but she nodded in approval. Now she’s also relaxed a bit, saying a small rate cut in September isn’t out of the question. Why? The inflation that looked wild seems a bit tamed, and the job market has indeed cooled down—so much so that she feels embarrassed to say ‘steady’! The employment growth data from a few months ago? It was dramatically revised down by the authorities themselves! Unemployed folks getting back to work? The waiting time is long enough to binge-watch a series! The cold wind is howling, truly drilling into the bones. Daly's face darkened, and she spoke firmly: “A crash? Not to that extent. But this trend is off! The wind is blowing in the wrong direction! Anyone who dares to pretend not to see this chill should pack up and leave!”
So what does she really want to do? The cards are laid out: right now, this policy might be too tight around the neck, nearly choking the economy to death. “We need to loosen the ropes,” Daly advocates for a ‘slow simmer,’ rather than stir-frying it on high heat—over the next year or so, take small steps, gradually adjusting the policy back to a ‘not too tight, not too loose’ state. This is fundamentally different from the market crowd that is clamoring to ‘get fat in one bite’!
What’s most critical is that Daly's ‘not too tight, not too loose’ (neutral interest rate) sounds like a capricious ghost! Back in June, she said there would probably be two rate cuts this year. But before the words left her mouth, she left herself a backdoor: “If the job market bleeds out worse than expected, hey, I’ll accept a rate cut in each of the remaining three meetings this year! On the contrary, if that old inflation monster suddenly comes back with a vengeance? Sorry, rate cuts? We’d start with a 50% reduction!” The expectation of this policy is as precarious as walking a tightrope blindfolded, making people's hearts race!
Daly’s thoughts on inflation also reveal a sense of ‘everyone is drunk, but I’m sober’ arrogance. Tariffs have been raised, yet commodity inflation didn’t explode? She’s started to pick up on something—this kind of ‘price increase leads to panic buying, and then forces another price increase’ death spiral, we might have already stepped over the threshold! Big companies have now become like ninja turtles, silently absorbing most of the increased costs from tariffs, without passing it all onto the people as the scapegoats. Daly made a relatable comparison: it’s like discovering a pinhole leak in a water pipe at home, the cost pressure quietly seeps and spreads along the long supply chain, rather than causing a massive explosion that floods the entire house with prices and bankrupts you!
Daly's core message is as sharp as a sword tempered by fire: the current situation is far from a moment when the Fed needs to carry an ‘emergency kit’ and rush in! What she’s really wary of is the market crowd that is just there to watch the fun, stoking the flames of panic by themselves! The job market has softened, but it hasn’t collapsed; inflation has retreated, but that ghost is still lurking ominously behind the rocks! Faced with this tangled fog, she insists on ‘feeling the stones to cross the river,’ cautiously ‘loosening the ties,’ rather than wildly swinging an axe to chop everything down!
Daly's barrage of criticism is like a bucket of icy cold water poured over the speculators hoping the Fed will immediately open the floodgates and let capital indulge! What she’s shouting is: adjusting this delicate economic instrument requires finesse, don’t swing around a club like a madman! Rushing to make drastic policy changes? You might end up being the arsonist of the next crisis!
When the market's reckless bets collide with the policymakers' cold caution; when the heartfelt plea of ‘take it slow’ meets the frantic demand of ‘hurry up,’ a huge question mark hangs over Wall Street like the sword of Damocles: Sister Daly is firmly holding down the interest rate cut lever, not giving an inch. What is she really afraid of? Is she afraid of the seemingly dormant beast of inflation, which is actually sharpening its fangs in the dark, ready to strike back? Or is she afraid of the insatiable capital hungry giants on Wall Street, ready to drag the Federal Reserve into the abyss of capital desire? How will this silent struggle ultimately tear apart everyone's expectations in a bloody manner? What’s more ruthless is, when she lets out this shout, is she really reminding the market to stay calm, or… is she ringing a warning bell for a certain chair in the temple?
