Fed's Daly Says Too Early to Tell if Rate-Cutting Cycle Has Ended

Mary Daly, President of the Federal Reserve Bank of San Francisco, said it is too early to determine if the rate-cutting cycle has ended ^[1].

This uncertainty signals that the U.S. central bank remains cautious about the trajectory of interest rates. Because the Federal Reserve balances inflation control with economic growth, any shift in the cutting cycle affects borrowing costs for millions of households and businesses.

Speaking in an interview with Bloomberg Television, Daly said her current assessment depends on specific economic indicators ^[1]. She said she is closely watching inflation expectations from both consumers and producers to gauge the stability of prices [1, 2].

These expectations serve as a primary signal for policymakers. If consumers and producers believe prices will continue to rise, it can create a self-fulfilling cycle that makes inflation harder to curb, a scenario the Fed seeks to avoid.

While the Federal Reserve has been reducing rates to support the economy, the timing of the end of this cycle remains fluid. Daly said she did not provide a specific timeline for future moves, instead emphasizing the need for ongoing data monitoring [1, 2].

The San Francisco Fed president's comments highlight the data-dependent approach the central bank has adopted. By focusing on producer and consumer outlooks, the Fed aims to ensure that inflation returns to its target before stopping the easing process ^[1].