Interest Rate Adjustments on the Horizon

Federal Reserve Bank of San Francisco President Mary Daly has indicated that the Federal Reserve is likely to reduce interest rates twice within the year. During a recent webcast titled "The US Economic Outlook and Challenges for Policymakers," Daly shared insights into the Fed's monetary policy direction.

Economic Fundamentals Support Rate Cuts

Daly emphasized that the U.S. economy is currently in a "good place," with economic fundamentals suggesting a move towards lower interest rates. "It's time to think about adjusting the interest rate," Daly remarked, hinting at potential rate cuts in the fall. However, she clarified that any decision to cut rates would depend on the continuation of current data trends.

Impact of Tariffs on Inflation

Addressing concerns over U.S. President Donald Trump's tariffs, Daly expressed skepticism about their long-term impact on inflation. She warned that delaying rate cuts in anticipation of higher inflation could put the central bank at a disadvantage.