In an interview with Reuters, San Francisco Fed President Mary Daly acknowledged that a rate cut is widely expected this month, but emphasized that the exact size of the cut remains uncertain.
“We don’t know yet, right?” Daly said, noting that key data such as the upcoming labor market and CPI reports will play a critical role in the decision-making process. She added, “I want more time to do all the work that’s needed to make the best decision.”
Daly also warned of the risks of over-tightening, particularly as inflation eases while the economy slows. “As inflation falls, we’ve got a real rate of interest that’s rising into a slowing economy; that’s a basic recipe for over-tightening,” she explained.
Highlighting the importance of protecting the labor market, she stressed that further slowing would be “unwelcome” and a key factor in shaping future policy decisions.
