Expert Insights: The Federal Reserve's Rate Debate Amid Economic Shifts

San Francisco Federal Reserve Bank President Mary Daly has indicated that interest rate cuts could be on the horizon as the U.S. job market softens. Daly highlighted the absence of persistent, tariff-driven inflation as a factor in the ongoing monetary policy debate.

While the Federal Reserve decided against cutting borrowing costs in its recent meeting, Daly remains open to rate adjustments in upcoming sessions. She noted that although September cuts aren't certain, the Fed considers each meeting an opportunity to reassess economic conditions and policy needs.

Daly expressed openness to more than the two planned rate cuts if data suggests softer labor conditions or stable inflation. Despite a minor uptick in unemployment, further labor market softening could necessitate policy changes to balance employment and inflation pressures effectively.