Federal Reserve's Daly: It is expected that the Federal Reserve will continue to cut interest rates to prevent further weakening of the labor market

In 2024, FOMC voter and San Francisco Fed Chair Daly stated that she expects the Federal Reserve to continue cutting interest rates to prevent further weakening of the labor market. Speaking at The Wall Street Journal's TechLive conference in Laguna Beach, California on Monday, Daly said, "So far, I have not seen any information indicating that we will not continue to lower interest rates. For an economy that is already on a path of 2% inflation rate, this is a very tight rate and I do not want to see further deterioration in the labor market."

She added that the goal is to achieve a "soft landing", i.e., reducing inflation rate to 2%, maintaining a healthy labor market and catching up wage levels with price increases. She said as inflation falls, the Fed needs to keep lowering policy rates or risk making policies overly tight which could harm the labor market.