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Fed's Daly 'Very Comfortable' With Two 2025 Rate Cuts

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Bloomberg 14:53 · 13.1k Views

Federal Reserve Bank of San Francisco President Mary Daly said she is "very comfortable" with policymakers' median projection of two interest-rate cuts in 2025. Daly added, "my projection is that it will take many fewer rate cuts next year than we thought but I’ll watch the economy and see if that works out."

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Transcript

  • 00:00 From September, the expectation in the markets was going into every meeting that you'd be cutting.
  • 00:06 Has that changed now?
  • 00:07 Should the expectation be that you won't be doing anything
  • 00:10 at any particular meeting?
  • 00:12 And
  • 00:13 from that question flows a second question.
  • 00:16 What are the criteria that you need to see to decide to go back to
  • 00:21 cutting rates?
  • 00:22 Well, as you saw from the
  • 00:24 Sep, the median projection is 2 rate cuts next year.
  • 00:28 So that's already not every other, not every meeting or every other meeting, that's two rate cuts.
  • 00:32 I was very comfortable with that median.
  • 00:34 That makes sense to me.
  • 00:36 But we have to remain agile.
  • 00:37 I mean, you know, the, the thing that's got us here
  • 00:40 is being resolute to achieve our dual mandate goals.
  • 00:43 Price stability was our focus when
  • 00:45 inflation was very high.
  • 00:47 The employment has come into the frame so that we're focused on both, but then we also have to be agile.
  • 00:52 You know, the world is uncertain, so we pencil into
  • 00:55 and, you know, as that
  • 00:57 estimate or that projection gets further from when we made it, the accuracy of it probably falls.
  • 01:03 And so we're just going to continually take in more information.
  • 01:06 Consider it.
  • 01:07 And
  • 01:08 every meeting, your listeners should think about this.
  • 01:10 Every meeting
  • 01:11 is live from the standpoint that you're debating, you're discussing, you're thinking what's the right level of policy.
  • 01:17 But my projection is that it will take much, many fewer rate cuts next year than we thought.
  • 01:23 But I'll watch the economy and see if that works out.