San Francisco Federal Reserve President Daly: The Federal Reserve does not need to be "preemptive" and should observe the impact of Trump's policies
Mary Daly, President of the San Francisco Federal Reserve, stated that the U.S. economy is in good shape and the Federal Reserve does not need to respond quickly to the policies of the Trump administration. She emphasized that there are many uncertainties at present, and preemptive actions should not be taken in decision-making. Daly pointed out that the task of bringing the inflation rate down to 2% is not yet complete and she will do her utmost. She mentioned that the policies of the Trump administration may have an impact on the economy, but it is currently unclear and requires observation of their net effects
According to the Zhitong Finance APP, Mary Daly, President of the San Francisco Federal Reserve, stated that the U.S. economy is in good shape and the Federal Reserve does not need to react quickly to the policies introduced by the Trump administration.
Daly said on Tuesday, "There is a lot of uncertainty at the moment." However, she added, "We can take our time to observe the economy and the impact of any policy changes."
Daly stated, "We do not need to take preemptive action in our decision-making."
The Federal Reserve official also mentioned that the task of reducing the inflation rate to 2% is not yet complete, and she is putting "100% of her energy" into this task.
Daly and other Federal Reserve officials are facing significant uncertainty due to the potential tariffs, immigration, tax, and regulatory policies that the Trump administration may implement, which could impact the U.S. economy.
She emphasized the importance of understanding the net effects of new policies, including their scope, scale, and timing of changes, but these factors are currently unclear.
She said, "If preemptive action is taken based on isolated observations of these factors, it could ultimately lead to policy mistakes."
Last weekend, President Trump announced a 25% tariff on Canada and Mexico, and then reached an agreement with the governments of both countries on Monday to delay the implementation of the tariffs for at least a month. However, a 10% tariff on Chinese goods took effect at midnight.
After three rate cuts by the Federal Reserve officials at the end of 2024, they maintained interest rates unchanged last week.
In another interview earlier on Tuesday, Daly told the media that she remains satisfied with policymakers' predictions for December, which show broad support for a 50 basis point rate cut this year