San Francisco Fed’s Daly Sees Inflation Easing, Expects Two Rate Cuts in 2025
Mary Daly, President of the Federal Reserve Bank of San Francisco, said Thursday that inflation in the U.S. is moving closer to the Fed’s 2% goal, expressing optimism that price stability is gradually being restored.
Speaking during a Q&A session, Daly remarked that consumer spending appears to be moderating — not collapsing — which indicates a controlled slowdown in economic activity rather than an abrupt downturn.
On the topic of tariffs, Daly acknowledged potential risks but said her main concern would be if the effects extended beyond import prices to broader areas of the economy. For now, she noted, retailers and importers seem to be absorbing a portion of the added costs, limiting the direct impact on consumers.
She added that forthcoming tariffs are unlikely to cause a sharp rise in consumer prices, suggesting that inflationary pressures from trade policy could remain contained.
Regarding monetary policy, Daly said she expects the Fed to implement two interest rate cuts in 2025, assuming inflation continues on its current downward path.
