Fed's Daly calls for more rate cuts, but Fed needs to watch labor and inflation

Joshua Gibson FXStreet

Federal Reserve (Fed) Bank of San Francisco President Mary C. Daly made additional comments on Thursday, acknowledging that further rate cuts will likely be needed from the Fed in the months to come, but admitted that the US central bank still needs to watch both sides of its mandate to support the labore market and control inflation.

Key highlights

The inflation impact of tariffs hasn't been as large as forecast, and has had a bigger impact on the labor market.
Rates remain modestly restrictive.
I think a little more rate cutting will be needed over time.
We are in a tradeoff space, we need to balance risks.
The US economy is in okay shape.
The Fed needs to monitor inflation and also the labor market for weakness.
New college graduates are having a hard time getting hired, and this is something we need to keep our eye on.
We're also watching low job finding rates, length of time it takes to find a job, as leading indicators on the labor market. Those are yellow flags for the job market.

Author

Joshua Gibson

FXStreet

Joshua joins the FXStreet team as an Economics and Finance double major from Vancouver Island University with twelve years' experience as an independent trader focusing on technical analysis.

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