San Francisco Fed President “If Inflation Rises Again, It May Be Difficult to Lower Rates Twice This Year”

Daily San Francisco Fed President (Source: Bloomberg)

Mary Daly, President of the San Francisco Federal Reserve Bank, warned that this year's US base rate cuts might be less than previously expected. According to foreign media reports, President Daly stated, “Currently, we are expecting two rate cuts this year, but if inflation rears its head again, the number of cuts may be reduced to less than two.”

She continued, “The Fed will not act hastily,” emphasizing that “a gradual and cautious approach to lowering policy rates is more appropriate.” While the US employment market remains stable, the Fed's top priority is still clearly price stability.

President Daly's remarks are interpreted as sending a message of caution to the market's expectations surrounding rate cuts this year, amid signs of a resurgence in inflation. Within the Fed, “slower and more limited cuts” are gradually being mentioned.