Mary Daly Supports Fed Rate Cut, Eyes December Data: Report

• Daly supports Fed’s latest rate cut, says December decision will hinge on fresh data.
• Fed lowers key rate to 3.75–4.00%, balancing high inflation with a slowing job market.
• Daly stresses patience and data-based action as policymakers weigh the next possible move.

Federal Reserve Bank of San Francisco President Mary Daly said on Monday she supported last week’s U.S. central bank rate cut. She said the decision was suitable for current economic conditions. Daly added that she would review fresh data before deciding if another rate change is needed in December. Her remarks came during an event in Florida attended by business leaders and policymakers.

The Federal Reserve lowered its benchmark interest rate by 25 basis points at its October 28–29 meeting. It was the second cut this year, and the rate now stands between 3.75% and 4.00%. Policymakers were divided, with some supporting more easing while others opposed any further reductions. The decision reflected caution over inflation and employment trends.

Inflation Pressure and Job Market Stability

Daly said the economy remains resilient but faces ongoing challenges. She explained that while inflation is above target, the labor market has softened. The Fed’s actions aim to balance both risks. Daly said she intends to rely on evidence before the next policy meeting on December 9–10. She emphasized that decisions would depend on data, not expectations.

The central bank has cut rates by a total of 50 basis points this year. Daly said the focus now is to determine if those moves provide enough protection against further weakness in the labor market. She added that the goal is to support employment without fueling inflation.

She said recent data show no signs of a collapsing job market. Unemployment insurance claims remain steady, suggesting moderate slowing rather than a downturn. Inflation is currently around 3%, still above the Federal Reserve’s 2% goal. Daly said this combination calls for patience and close monitoring.

The ongoing federal government shutdown has disrupted access to official economic data. Daly said the Fed continues to collect information from private surveys and regional contacts. These sources include business owners, workers, and community groups. She said these insights help guide policy decisions when official figures are delayed.

Daly explained that policymakers often begin with differing opinions before meetings. However, she said, views tend to narrow as more information becomes available. This process, she noted, helps the committee find common ground on the best policy action.

Fed Officials Split on Rate Cuts and Inflation Strategy

At the last meeting, the Federal Open Market Committee voted 10–2 in favor of the rate cut. Fed Governor Stephen Miran called for a deeper 50-basis-point reduction. Kansas City Fed President Jeffrey Schmid dissented, saying he preferred to leave rates unchanged. Both dissents reflected differing views on how to balance inflation and growth.

Schmid said the labor market remains balanced and the economy continues to expand. He expressed concern that lowering rates could weaken confidence in the Fed’s commitment to its inflation target. He said a smaller adjustment would not address long-term labor challenges linked to technology and demographics.

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He added that inflation control is the Fed’s main responsibility. Schmid said he preferred to maintain rates until inflation moves closer to the target. He warned that further easing could raise inflation expectations if not managed carefully.

Recent data showed the consumer price index rose to 3% in September, the highest since January. Job growth slowed over the summer, reflecting both cooling demand and lingering cost pressures. These mixed signals have left policymakers divided over the next move.

Daly said she would continue to review new information closely. She said her approach remains open-minded and evidence-based. The next meeting would determine if the economy requires more support or if the recent adjustments are sufficient. For now, Daly said careful observation is the most prudent approach.