(Nov 4): US Federal Reserve Bank of San Francisco president Mary Daly said the US central bank should “keep an open mind” about the possibility of another interest-rate cut at its next policy meeting in December.
Daly, speaking Monday at the Forum Club of the Palm Beaches in West Palm Beach, Florida, said she agreed with the Fed’s decision last week to lower its benchmark rate by a quarter percentage point for the second month in a row, calling the move “appropriate”.
The San Francisco Fed chief argued that the central bank currently faces a tradeoff between its two mandates. On one hand, it needs to keep putting downward pressure on inflation, which remains above its target. But on the other, it needs to support the labour market to allow people to catch up after the high inflation of recent years eroded purchasing power.
“This really means assessing the incoming information, keep an open mind, and make the decision that balances those risks and ensures that the economy can go on and achieve the soft landing,” Daly said.
Fed officials speaking since last week’s rate cut have outlined opposing views about the path forward. Fed chair Jerome Powell told reporters after the decision on Wednesday that another reduction in December was “not a forgone conclusion”. His remarks caused investors to lower the probability they saw for a third straight quarter-point cut.
Uploaded by Liza Shireen Koshy
