Fed’s Daly says rate cuts could start next month

Published 16/08/2025, 09:42

Investing.com -- San Francisco Federal Reserve President Mary Daly said she still expects interest rate cuts to begin as soon as next month, even after stronger retail sales and an unexpected jump in wholesale prices in July.

In an interview with Fox Business, Daly said a cooling labor market and an economy that is “slowing but not slow,” weighed against inflation that remains above target, “would warrant a couple of cuts sometime this year.”

She added that two rate reductions remain a reasonable projection, though the exact number will depend on upcoming data.

“Of course, we will wait to see the data and maybe it’ll be fewer, maybe it’ll be more, but ultimately, I think two remains a good projection,” Daly said.

“What I don’t want to do is be so worried that inflation might come up again or be persistent that we wait for that clarity and don’t support the labor market,” she added.

The Fed Rate Monitor Tool indicates an 83% chance of a 25-basis-point cut in September, while markets see a 17% probability that the Fed leaves rates unchanged.

 
 

 

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