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Fed's Daly: Labor Market Slowing, Tariffs Only Short-Term Impact, Fed Likely to Cut Rates Soon
Summary: According to sources, San Francisco Fed President Daly stated on Wednesday that considering the slowing labor market and her assessment that tariffs pose only a short-term threat to inflation, she believes the Fed will soon need to cut rates. In the absence of tariffs, inflation has been gradually declining, with the economy slowing and monetary ...
According to sources, San Francisco Fed President Daly stated on Wednesday that considering the slowing labor market and her assessment that tariffs pose only a short-term threat to inflation, she believes the Fed will soon need to cut rates. In the absence of tariffs, inflation has been gradually declining, with the economy slowing and monetary policy remaining restrictive, inflation should continue to fall. She added that although tariffs will temporarily boost inflation, they are unlikely to have a lasting impact. Meanwhile, the labor market has already weakened. I think further slowdown would be worrisome, as once the labor market falters, it tends to slide rapidly and severely. All of this suggests that we are likely to need to adjust policy in the coming months.
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Link: Fed's Daly: Labor Market Slowing, Tariffs Only Short-Term Impact, Fed Likely to Cut Rates Soon [Copy]
