Mary Daly, the President of the Federal Reserve Bank of San Francisco, expressed her support for a cut in the benchmark interest rate in December, citing concerns about a weakening labor market, as reported by The Wall Street Journal (WSJ) on the 24th local time.
In an interview with the WSJ that day, President Daly stated, “When looking at the labor market, I’m not confident that we are going to make it,” adding that “the labor market is currently fragile enough to experience non-linear changes (sudden deterioration).”
On the other hand, regarding inflation, she assessed that the risk appears lower compared to the labor market, considering that the cost increase due to the tariff policy of the Trump administration earlier this year has been more moderate than initially expected.
President Daly does not have voting rights at this year’s or next year’s Federal Open Market Committee (FOMC).
As the FOMC meeting of the Federal Reserve (Fed) approaches on December 9-10, there is an unusually intense difference of opinion between committee members who support holding rates steady and those who support a rate cut.
Just a week ago, the expectation that the Fed would keep rates unchanged was somewhat dominant, but after John Williams, President of the New York Fed, suggested on the 21st that there is still room for further adjustment of the benchmark interest rate in the near future, the expectation for a rate cut in December has gained traction.
[Photo source: Reuters=Yonhap News]
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