Fed's Daly: The time for rate cuts is approaching, and the number of rate cuts this year is more likely to be more than two

San Francisco Fed President Mary Daly said the time for a rate cut is near, given growing evidence of a weakening labor market and the lack of persistent tariff inflation. Speaking about the Fed's decision last week, Daly said, "I'm willing to wait one more cycle, but I can't wait forever." While that doesn't mean a September rate cut is a foregone conclusion, she said, "I would tend to think of every meeting going forward as an immediate meeting to consider policy adjustments." Daly said two 25 basis point rate cuts this year still appear to be an appropriate readjustment, and the question of whether rate cuts occur in both September and December is more important than whether they occur at all. "If inflation picks up and spreads, or if the labor market picks up, fewer cuts are certainly possible, but more likely, more than two will be necessary," Daly said. "If the labor market appears to be entering a period of weakness and we don't see inflation spillover, we should be prepared for more rate cuts." (Jinshi)