Fed’s Daly rules out certain rate cuts in 2025

Mary Daly, President of the Federal Reserve Bank of San Francisco, emphasized the uncertainty surrounding further interest rate cuts in 2025. While acknowledging the positive state of the US economy, citing solid GDP growth and a strong labor market, Daly highlighted the significant uncertainties that persist. She noted that while progress on inflation is encouraging, it is slower than desired.

Daly also stressed the importance of carefully assessing the impact of any further adjustments to monetary policy, balancing the need to curb inflation without jeopardizing the labor market. She emphasized the need for more data before making any decisions, cautioning against rushing into actions that might later be regretted.

A key source of uncertainty, Daly pointed out, is the unknown scope, magnitude, and timing of new administration policies. While affirming that current policy is well-positioned and adaptable, she stated that preemptive decisions based on speculation about future policies are unwise. Daly also expressed confidence in the stability and soundness of the banking system.