San Francisco Federal Reserve President Mary Daly has pushed back against the need for an interest rate cut of 50 basis points at the Federal Reserve’s September meeting, the Wall Street Journal reported on Thursday.
“Fifty sounds, to me, like we see an urgent — I’m worried it would send off an urgency signal that I don’t feel about the strength of the labor market,” Daly said in an interview with the Journal on Wednesday. “I just don’t see that. I don’t see the need to catch up.”
Since the Federal Reserve’s decision last month to hold interest rates steady, a shift appears underway at the U.S. central bank, with several Fed officials sounding increasingly uneasy about the labor market and signaling their openness to, if not impatience for, a rate cut as soon as September.
Their evolving stance may please U.S. President Donald Trump, who has pushed aggressively for lower interest rates all year.
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Daly supported the Fed’s decision last month to hold rates steady, according to the Journal, and has since indicated shewould support a September cut because inflation pressures haven’t been as stiff as feared and job-market conditions have softened.
“Policy is likely to be too restrictive for where the economy is headed. So for me, that calls for recalibration,” she said to the Journal. Daly favors moving gradually to a more neutral setting “over the next year or so.”
U.S. Treasury Secretary Scott Bessent pressed for the rate cuts as the administration moves forward in its search for a replacement for Fed Chair Jerome Powell, with the list of potential candidates now having grown to 11.
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