Fed’s Daly: One or two rate cuts this year would be more or less the appropriate path

Federal
Reserve
(Fed)
Bank
of
San
Francisco
President
Mary
C.
Daly
acknowledged
improving
inflation
figures
on
Thursday but
warned
that
shelter
inflation
and
labor
remain
sticking
points,
and
that
expectations
of
three
rate
cuts
may
be
an
overreaction.

Key
highlights

The
economy
looks
to
be
on
a
path
where
one
or
two rate
cuts
this
year
would
be
more
or
less
the
appropriate
path.

My
expectation
is
that
inflation
will
come
down
gradually,
the
labor
market
is
gradually
slowing.

Recent
inflation
prints
are
a
relief,
but
progress
is
bumpy.

It
is
likely
some
policy
adjustments
will
be
warranted.

The
labor
market
has
softened
but
is
still
solid.

We
are
at
the
point
where
additional
labor
market
slowing
is
more
likely
to
result
in
a
rise
in
unemployment.

The
decline
in
super-core
ex-housing
inflation
is
welcome.

Shelter
prices
are
coming
down,
but
the
lack
of
supply
means
the
process
is
slower
than
it
has
been
in
history.

It’s
a
fairly
big
signal
from
the
Fed
that
so
many
of
us
are
talking
about
the
labor
market.