Fed: One or two more rate cuts this year if forecasts come true – Mary Daly

San Francisco Federal Reserve Bank (Fed) President Mary Daly noted Tuesday that while the Fed has made significant progress in reducing inflation while keeping the U.S. labor market within averages In the long term, there is still much to do. The Fed policymaker also addressed the current scope for rate cuts, noting that the Fed will likely only see one or two more rate cuts in 2024.

Highlights

If forecasts hold true, I see one or two more rate cuts this year.

Talk of gradual rate cuts means less than it seems.

I am more comfortable that the Fed can reduce the balance sheet without problems in the market.

Turning points, like now, are likely to generate more dissent.

The lack of dissent at the Fed does not mean that officials are in complete agreement.

I see signs that the housing market is coming back to life.

I won’t be surprised by the messy economic data.

A rate of 3% may be close to neutrality.

The funds rate is a long way from where it is likely to stabilize.

The withdrawal of inflation has been widespread.

The Fed has managed to reduce inflation without major disruption.

I am cautiously optimistic about the economic outlook.

Continued expansion remains very possible.

The labor market has cooled, largely normalized since the pandemic.

The economy is clearly in a better situation, inflation has decreased a lot.

The current unemployment rate is close to the long-term level.

Data shows that the public expects inflation to decline further over time.

The Fed’s monetary policy remains restrictive and we are working to reduce inflation.

Continued progress on the Fed’s goals is not assured, the Fed must remain vigilant.

The Fed must achieve 2% inflation while keeping the labor market at full employment.

The risks to the Fed’s employment and inflation mandates are now more balanced.