Fed’s Daly: Labor Market Is Slowing, Tariffs Have Only Short-Term Impact, Fed Will Cut Rates Soon

According to a report by Jinse Finance, San Francisco Federal Reserve President Mary Daly stated on Wednesday that, given the slowdown in the labor market and her assessment that tariffs pose only a short-term threat to inflation, she believes the Federal Reserve will soon need to cut interest rates. "Even without tariffs, inflation has been gradually declining. As the economy slows and monetary policy remains restrictive, inflation should continue to fall." She added that although tariffs will push up inflation in the short term, they are unlikely to have a lasting impact. Meanwhile, the labor market has already weakened. "I think further slowdown would be concerning, as once the labor market starts to falter, it often deteriorates quickly and severely. All of this means we will likely need to adjust policy in the coming months."