Federal Reserve Bank of San Francisco President Mary Daly said Thursday it is too early to determine if the rate-cutting cycle has ended [1].
This cautious stance indicates that the central bank is not yet ready to commit to a long-term interest rate plateau. Because the Fed's decisions influence borrowing costs for millions of households and businesses, Daly's comments suggest a continued period of economic uncertainty regarding the cost of capital.
Daly said that the Federal Reserve is closely monitoring inflation expectations from both consumers and producers [1]. This data will be critical in deciding whether the current trajectory of interest rates needs further adjustment to maintain price stability in the U.S. economy.
While the central bank has already implemented cuts, Daly indicated that further action remains a possibility. She said a rate cut could still be appropriate in the fall or in December 2026 [3].
"The fundamentals of the U.S. economy are moving to where an interest rate cut may be necessary," Daly said [2].
Despite that possibility, she cautioned against making definitive predictions for the end of the year. "It’s too early to determine whether a rate cut is appropriate for December," Daly said [3].
Her comments emphasize a data-dependent approach to monetary policy. By focusing on producer and consumer expectations, the San Francisco Fed president is signaling that the central bank will not act on speculation, but rather on verified economic indicators [1].
"It is too early to tell if we are at the end of the rate-cutting cycle," Daly said [1].
“"It is too early to tell if we are at the end of the rate-cutting cycle."”
The Federal Reserve is maintaining a flexible posture to avoid premature policy shifts. By refusing to declare the end of the rate-cutting cycle, Daly is keeping the door open for further easing if inflation expectations soften or economic growth slows, while simultaneously preventing the market from pricing in guaranteed cuts for the remainder of 2026.
