Fed: Daly acknowledges that waiting too much could make the Fed delay in rates

The president of the Bank of the Federal Reserve (Fed) of San Francisco, Mary Daly, appeared in the news on Thursday, following previous comments of her colleague Fed policy formulator, Christopher Waller, but adopting a more measured approach when discussing the potential for short -term Fed features.

Key points

• The economy is in a good place, growth and employment are solid, inflation is decreasing.
• The Fed has the ability to restore pricing stability softly, given the state of the economy.
• Monetary policy remains restrictive.
• The labor market is cooling and growth is moderating, but the data is not weakening significantly.
• Daly does not expect a very persistent inflationary impact by tariffs.
• Daly says it’s time to think about adjusting the interest rate.
• Daly sees two cuts as a probable result for Fed.
• There is a lot of uncertainty about policy perspectives.
• To cut rates, the Fed needs a continuation of current data trends.
• Supply and demand in the labor market are approximately in equilibrium.
• Economic foundations support a movement towards lower rates at some point.
• A real weakening of the labor market could boost a rate cut, but inflation problems could lean in the other direction.
• The Fed should always have an open mind about the change of rates.