Federal Reserve Bank of San Francisco President Mary Daly explains the recent 25-basis-point rate cut in her latest comments, signaling a slower pace of future cuts. The move surprised markets and sparked a sell-off in stocks and bonds as traders adjusted to the new forecast.
Daly shares her views on the balance of risks to the economy, highlighting areas where risks lie. She also discusses inflation and the labor market, including the impact of AI on productivity. Additionally, she addresses the potential implications of new policies from the incoming Trump administration.
The rate cut was part of a broader shift in the Fed’s stance, with Daly cautioning that economic growth is slowing. This has led to increased uncertainty about the economy’s future trajectory, prompting the central bank to reassess its policy path.
Source: https://www.bloomberg.com/news/articles/2024-12-23/sf-fed-bank-president-mary-daly-talks-the-most-recent-rate-cut