Associated media – Associated media
Mary Daly, President of the Federal Reserve Bank of San Francisco, addressed the National Association of Business Economics (NABE) Economic Policy Conference in Washington, DC, on February 16, 2024, signaling potential interest rate cuts by year-end without specifying the timing or magnitude of such measures.
Daly indicated that improvements in inflation metrics and a notable deceleration in hiring might drive the Federal Reserve to adjust monetary policy. “There will be some policy adjustments that need to be made in the next quarter. How much and when that is needed, I think, will depend a lot on the information that is coming in,” she stated at a forum in Hawaii. “But in my view, we have now confirmed that the labor market is slowing, and it is extremely important that we do not let it slow so much that it becomes a recession.”
Her remarks coincided with Wall Street experiencing its steepest decline in nearly two years, driven by investor concerns over slowing economic growth and the Federal Reserve’s response. Although Fed officials hinted at potential rate reductions in last week’s meeting, they provided few specifics.
Concerns intensified over the next two days with weak reports on layoffs, manufacturing, and job creation, raising fears that the Fed might be acting too slowly.
Daly, a voting member of the Federal Open Market Committee (FOMC), reassured that policymakers are committed to achieving their dual mandate of price stability and full employment. “We will do what is necessary to ensure that both our objectives, price stability and full employment, are met,” she emphasized. “We will make policy adjustments as the economy provides the data and we know what is needed.”
Echoing this sentiment, Chicago Fed President Austan Goolsbee mentioned to CNBC that the current “tight” interest rate policy is unwarranted unless the economy is overheating, which he argued it is not. Goolsbee assured that the Fed would address any emerging economic issues promptly.
Associated media – Linked media
