San Francisco Fed President Mary Daly said she supported last week’s interest-rate cut, calling it right for today’s economy. Another move? She isn’t pre-committing. Daly said the December 9–10 decision will be driven by evidence, not hopes or fears.
At the October 28–29 meeting the Fed trimmed rates by 25 bps — the second cut this year — setting the target range at 3.75–4.00%. Officials were split: some pushed for deeper easing, others wanted a pause, reflecting caution around sticky inflation and a cooling labor market.
Inflation vs. jobs: walking the line
Daly described an economy that’s resilient yet slowing. Inflation is ~3%, above the 2% goal. Jobless claims are steady — a cool-down, not a crack. The task, she said, is to support employment without reigniting price pressures. Patience. Watch the data. Then act.
With the government shutdown delaying official releases, the Fed is leaning more on private surveys and regional contacts — business owners, workers, community groups — to fill the gaps.
Current rate range: 3.75–4.00%
- 70.1% expect a cut to 3.50–3.75%
- 29.9% expect no change
After the latest 25 bps move, markets are leaning toward further easing by year-end, reflecting softer labor momentum, ebbing inflation pressure, the data delays from the shutdown, and officials’ calls — including Daly’s — for a patient, data-driven stance.
Why the split?
The vote was 10–2. Governor Stephen Miran wanted a 50 bps reduction; Kansas City Fed President Jeffrey Schmid preferred to hold, warning that too much easing could jar inflation expectations. Mixed signals — CPI near 3%, slower summer hiring — leave the next step genuinely open.
Daly’s bottom line: stay open-minded, keep reading the tape, and decide in December whether the economy needs more support or if recent moves are enough.