Fed’s Daly Says Still Comfortable With Two Rate Cuts in 2025 - Bloomberg

Fed’s Daly Says Still Comfortable With Two Rate Cuts in 2025 - Bloomberg

Federal Reserve Bank of San Francisco President Mary Daly reaffirmed her stance on the Fed's interest rate policy, indicating that she remains comfortable with the projections that the central bank will lower rates twice this year. This sentiment was expressed during an interview with Fox Business on May 30, 2025 [3].

Daly's comments come amidst a backdrop of economic uncertainty, particularly concerning the potential impact of President Trump's 2025 tariffs. The San Francisco Fed chief noted that the incoming economic data has been positive, but she emphasized that the picture is incomplete and that risks still need to be considered.

The Fed has kept interest rates unchanged so far in 2025, citing a strong economy and uncertainty over policy changes like tariffs. However, recent developments, including a federal appeals court temporarily reviving Trump's tariff agenda, have added complexity to the economic outlook [3].

Analysts at Granite Bay have also suggested that the Fed could resume rate cuts in 2025, potentially twice in the last months of the year. This prediction aligns with data from the Chicago Mercantile Exchange, which indicates market expectations for Federal Reserve actions [1].

The potential for rate cuts could influence economic stability and investment trends. Some market experts have suggested that rate reductions could delay inflation increases and influence financial strategies. TD Securities, for instance, has indicated that the court ruling suspending most of Trump's 2025 tariffs could delay inflation increases and keep the Fed's plans to cut interest rates on hold for longer than expected [2].

Mary Daly's comments highlight the Fed's cautious approach to monetary policy, emphasizing the need to keep the policy rate modestly restrictive until inflation reaches the 2% target. The upcoming Federal Open Market Committee (FOMC) meeting on June 17-18 is widely expected to see the Fed hold rates steady, but the potential for rate cuts later in the year remains a topic of interest for investors and financial professionals.

References:

[1] https://coincu.com/340496-fed-rate-cuts-2025-predictions/
[2] https://www.marketwatch.com/livecoverage/stock-market-today-dow-s-p-nasdaqjumpafter-court-halts-trump-tariffs-nvidia-earnings/card/tariff-ruling-likely-delays-inflation-spike-and-fed-rate-cuts-to-q4-at-the-earliest-says-td-securities-SVvR3fBXbi8V4UGrxZfV
[3] https://www.bloomberg.com/news/articles/2025-05-30/fed-s-daly-says-still-comfortable-with-two-rate-cuts-in-2025