Recently, Mary Daly, President of the Federal Reserve Bank of San Francisco, expressed important views on the direction of the Fed's monetary policy. She pointed out that with increasing signs of weakness in the job market and the easing of inflationary pressures caused by tariffs, the timing for interest rate cuts may be approaching.

Daly reviewed the Fed's decision from last week and stated that she is willing to wait for another cycle, but cannot postpone indefinitely. While this does not mean a rate cut is guaranteed in September, she emphasized that each subsequent meeting will become a critical moment for considering policy adjustments.

Regarding the interest rate cut, Daly believes that two cuts of 25 basis points each within the year still represent a reasonable policy adjustment. She is more concerned about whether the timing of the cuts will fall in September and December, rather than whether the cuts themselves will occur.

Daly further elaborated on policy choices under different economic scenarios. If inflation rises and spreads, or if the labor market improves, there may be fewer than two rate cuts. However, it is more likely that more than two rate cuts will be needed. Particularly, when the labor market remains weak and there is no sign of inflation spillover effects, the Fed should be prepared to take further rate cut actions.

This statement reflects the Fed's cautious attitude towards the economic situation and its flexible stance on monetary policy. Market participants will closely monitor future economic data and comments from Fed officials to assess the specific timing and magnitude of interest rate cuts.