Concerns Over Premature Rate Cuts

Mary Daly, President of the Federal Reserve Bank of San Francisco, has voiced her opposition to a 50-basis point interest rate cut in September. She worries that such a move might send an unintended signal of urgency that doesn't align with the current strength of the labor market.

Labor Market Insights

In a revealing interview with The Wall Street Journal, Daly shared her perspective on the labor market's condition. "I just don't see the need to catch up," she stated, pointing out that while the market isn't in bad shape, the trend is concerning. "The direction of change is going the wrong way," Daly observed, emphasizing the importance of not overlooking the softening signs.

Call for Gradual Adjustment

Daly advocates for a more measured approach to monetary policy adjustment. "Policy is likely to be too restrictive for where the economy is headed," she explained, suggesting a gradual recalibration over the coming year to better suit the evolving economic landscape.