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Investing.com -- San Francisco Federal Reserve President Mary Daly has expressed opposition to a 50 basis point interest rate cut at the Federal Reserve’s September meeting, suggesting such a move would signal unwarranted urgency about labor market conditions.
"Fifty sounds, to me, like we see an urgent — I’m worried it would send off an urgency signal that I don’t feel about the strength of the labor market," Daly said in an interview with the Wall Street Journal. "I just don’t see that. I don’t see the need to catch up."
Since the Fed’s decision to maintain interest rates at their current level last month, several Fed officials have shown increasing concern about the labor market and indicated openness to a rate cut in September.
Daly, who supported the Fed’s previous decision to hold rates steady, has since indicated she would back a September cut, noting that inflation pressures have been less severe than anticipated and job market conditions have weakened.
"Policy is likely to be too restrictive for where the economy is headed. So for me, that calls for recalibration," she told the Journal. Daly prefers a gradual approach toward a more neutral policy stance "over the next year or so."
The evolving stance among Fed officials may align with U.S. President Donald Trump’s persistent calls for lower interest rates throughout the year.
Meanwhile, U.S. Treasury Secretary Scott Bessent has advocated for rate cuts as the administration continues its search for a replacement for Fed Chair Jerome Powell, with the candidate list now expanded to 11 potential nominees.
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