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Investing.com -- Federal Reserve Bank of San Francisco President Mary Daly indicated that rate cuts might be on the horizon for this fall, as evidence suggests tariffs may not cause significant inflation.
"My modal outlook has been for some time that we would begin to be able to adjust the rates in the fall, and I haven’t really changed that view," Daly said Thursday in a Bloomberg Television interview.
The San Francisco Fed chief described three possible scenarios for how tariffs could affect prices. These include a delayed but persistent inflation effect, a one-time price increase, or minimal price impact from tariffs.
While Daly did not consider the minimal impact scenario as her main expectation, she noted it is "increasingly possible."
Daly reaffirmed that current monetary policy is in a "good place." The Federal Reserve has maintained steady interest rates during all four of its meetings this year, as officials monitor how tariffs, fiscal policy, and other Trump administration policies affect economic conditions.
Regarding employment, Daly observed that although the labor market is slowing down, she does not see signs that it is weakening significantly.
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