Key Facts
• San Francisco Fed President Mary Daly foresees two rate cuts in 2025.
• Daly noted tariffs’ price impact may be milder than initially expected.
• Some companies are negotiating to share tariff costs, reducing consumer burden.
• Daly stated firms may absorb costs by lowering profit margins.
• Consumer price increases due to tariffs are unlikely to be significant.
• U.S. economy remains in good condition despite slowing growth and consumption.
• Inflation is progressing toward the Federal Reserve’s 2% target.
• Daly acknowledged uncertainty in all policymakers’ forecasts.
• The Federal Open Market Committee (FOMC) will meet on July 29-30.
Summary
San Francisco Fed President Mary Daly anticipates two rate cuts in 2025, citing a high likelihood for this scenario. She highlighted that the impact of tariffs on consumer prices might be less severe than initially expected, as some companies are negotiating to share tariff costs and reduce the burden on consumers. Daly also noted that firms might address these costs by cutting profit margins, preventing significant consumer price hikes. While the U.S. economy is slowing in growth and consumption, it remains stable, with inflation moving toward the Federal Reserve’s 2% target. Daly emphasized the inherent uncertainty in economic forecasts. The Federal Open Market Committee is scheduled to convene on July 29-30 to discuss further monetary policy actions.
