Federal Reserve officials are calling for a rate cut in December! More worried about losing jobs than inflation! Another strong dovish voice has emerged within the Federal Reserve! San Francisco Fed President Daly (who will have voting rights in 2027) spoke out yesterday, stating that she supports a rate cut in December! She believes that the likelihood of a sudden deterioration in the labor market is greater than a sudden rise in inflation. Moreover, once the labor market collapses, it becomes harder to control. In the labor market, I am not confident that we can stay ahead. The labor market is already weak enough, and the risk lies in nonlinear changes.

She feels that the risk of an inflation outbreak is relatively low, as the cost increases driven by tariffs are much more moderate than previously expected. Although Daly does not have voting rights this year, she rarely contradicts Federal Reserve Chairman Powell in public. Her standing up at this moment indicates that the dovish forces within the Federal Reserve are strengthening. At the meeting on December 9th to 10th, her views may play a key role in resolving the divergence between cutting rates or pausing rate hikes. The possibility of a rate cut in December has increased significantly! Everyone hopes that the Federal Reserve will quickly loosen monetary policy.