Fed’s Daly sees regular, normal cadence as path for rate cuts

San Francisco Fed President Mary Daly said in a Bloomberg TV interview that “the time is upon us” to cut interest rates, strongly suggesting that a rate reduction in September is highly likely.

Daly expressed concerns about maintaining “highly restrictive into a slowing economy”, and stated that it is “hard to imagine” not easing rates soon.

Daly outlined her most probable outlook, which involves inflation gradually slowing and the labor market continuing to add jobs at a “steady, sustainable” pace. If this scenario holds, she noted, adjusting policy at a “regular, normal cadence” would be reasonable.

However, Daly also indicated that if the labor market shows any signs of deterioration or weakness, “being more aggressive” in policy adjustments would be appropriate to avoid further economic strain.