Fed will likely need to cut rates in coming months, Daly says
"Inflation, absent tariffs, has been gradually trending down, and with a slowing economy and ongoing restrictive monetary policy, should continue to do so," Daly said in remarks prepared for delivery to the Anchorage Economic Summit, adding that while tariffs will boost inflation in the near-term, they likely won't do so persistently.
Meanwhile, she said, the labor market has softened.
"I would see additional slowing as unwelcome, especially since we know that once the labor market stumbles, it tends to fall quickly and hard," Daly said. "All this means that we will likely need to adjust policy in the coming months."
The Fed decided last week to keep short-term interest rates in their current 4.25%-4.50% range.
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