MNI BRIEF: Daly Says Fed Rate Cut Looks Promising In Fall

San Francisco Fed President Mary Daly said Thursday it is looking increasingly possible that the central bank can lower interest rates this fall, as inflation might see less upside pressure from tariff increases. 

"My modal outlook has been for some time that we would begin to be able to adjust the rates in in the fall and I haven't really changed that view," she said in an interview with Bloomberg TV. "It's both sides of our mandate that have really come into frame since we brought inflation down from the the really high levels to something that's closer to our target. Ultimately, we have to watch both sides and that's what I'm doing, and then the fall looks promising for a rate cut."

She said the labor market looks solid and "there are really no warning signs that it's weakening." Inflation data have "been good," but the central bank should be forward looking. "It's not my modal, but it's increasingly possible, is that this just doesn't amount to as much as the models and history would tell us, because businesses find ways to absorb the cost, and they split it out in the production chain, and ultimately consumers pay less," Daly said.