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Investing.com -- Mary Daly, the President and CEO of the Federal Reserve Bank of San Francisco, participated in a Q&A session following her speech at the 2025 Conference for Community Bankers (NASDAQ:ESXB).
Daly expressed a positive outlook on the economic state, stating that the economy remains in a solid position. She noted that the GDP growth remains consistent and the labor market continues to be robust with minimal indicators of concern at this point.
On the topic of inflation, Daly mentioned that it’s gradually decreasing, albeit slowly at times. She emphasized that despite the slow progress, there’s no cause for discouragement as the decline in inflation is evident.
In terms of monetary policy, Daly said the Federal Reserve’s approach remains restrictive, aiming to put downward pressure on inflation by aligning the economy’s demand with the available supply. She stated that this policy would stay in place until significant progress on inflation is observed.
When asked about the possibility of further rate cuts, Daly indicated that the Federal Reserve is committed to bringing inflation down to 2%. She stressed that this should be done as gently as possible to avoid harming the labor market or economic growth. She also expressed the need for caution before making the next adjustment to avoid distorting growth or the labor market.
Despite acknowledging the existence of uncertainty, Daly denied that it leads to paralysis. She emphasized that rushing to conclusions could lead to mistakes. Instead, she advocated for the need to gather more information to make informed decisions about future monetary policy.
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