Fed's Daly: Inflation has eased, more information needed before making interest rate decisions
Mary Daly, President of the Federal Reserve Bank of San Francisco, stated that inflation is declining, boosting confidence in inflation falling to the 2% target. She emphasized the importance of labor market risks and inflation, stating that more information is needed to make a true decision. In addition, Federal Reserve Chairman Jerome Powell also indicated that inflation is moving towards the 2% target, potentially paving the way for a rate cut in the near future. Powell emphasized concerns about potential risks in the labor market
According to the Wise Finance APP, Mary Daly, President of the Federal Reserve Bank of San Francisco, stated that inflation is declining, which has increased people's confidence that inflation will fall to the target level of 2%. At the same time, Daly added that despite the economic slowdown, policymakers should now focus on labor market risks and inflation, but "we need more information before making any real decisions."
Daly is a voting member of the Federal Open Market Committee (FOMC) this year. She refused to disclose when the Fed will start cutting interest rates and how many times it will cut. She said, "For a period of time, policy may normalize to some extent, but the possibility of this normalization depends on the data we receive, not where we are today."
Daly also stated that the risks facing the labor market and price stability are better balanced, but the Fed remains committed to achieving the 2% inflation target. Over the past 12 months, the Fed has kept the federal funds rate at a 23-year high, waiting for inflation to cool down. Last week's U.S. June CPI data came in below expectations across the board, increasing market bets that the Fed will start cutting rates as early as September.
In addition, Fed Chairman Jerome Powell said in a speech on Monday that second-quarter economic data has made policymakers more confident that inflation is heading towards the Fed's 2% target, which could pave the way for rate cuts in the near future.
Powell emphasized the recent three inflation data points, but made it clear that he does not intend to convey any specific information about the timing of rate cuts. He further emphasized concerns about potential risks in the labor market while continuing to focus on price control. He said, "We didn't gain additional confidence in the first quarter, but the three data points in the second quarter, including last week's, have indeed increased some confidence. Now that inflation has fallen, and the labor market has indeed cooled, the balance between the two tasks is much better."