San Francisco Fed President Daly supports steady rates but warns of aggressive hikes if inflation rebounds, keeping near-term cut expectations in check.
San Francisco Fed President Mary Daly fully endorsed the Federal Reserve’s decision to hold interest rates steady at the July FOMC meeting. She emphasized a cautious, data-dependent approach ahead of September, signaling no imminent easing despite fading tariff effects and potential Middle East stability improvements.
Daly’s remarks underscore a divided committee, with three officials dissenting in favor of hikes last week. Her warning that the Fed would act aggressively if inflation momentum rebuilds adds hawkish tail risk, limiting how far rate cut expectations are priced. Markets may also take comfort from her view that businesses have limited pricing power to pass on higher costs, suggesting current price pressures could ease.
The comments reinforce elevated uncertainty around the Fed’s rate path, with traders closely watching upcoming data for signs of persistent inflation or cooling pressures.