San Francisco Fed President Mary Daly said overnight that she expects the central bank will need to cut interest rates “in the coming months,” citing a gradually cooling economy and persistent downside risks in the labor market. “I would see additional slowing as unwelcome,” Daly warned, adding that the labor market tends to “fall quickly and hard” once momentum is lost.
Daly also downplayed the inflationary impact of US tariffs, saying they pose only a short-term threat. Excluding tariff effects, she noted, inflation has been “gradually trending down,” and should continue to ease given restrictive policy and moderating demand.
