(Kitco News) - San Francisco Federal Reserve President and FOMC member Mary Daly said that she feels no urgency to lower interest rates, and that notwithstanding the central bank’s latest ‘dot plots’, three cuts this year is not guaranteed.
“There is really no urgency to adjust the rate,” Daly said at an event in Las Vegas, Nevada on Tuesday. “Standing pat is the right policy at the moment.”
While she acknowledged that inflation has been coming down it the United States, she characterized the journey as “bumpy and slow.”
Markets have all but abandoned hope of a May cut to the Fed funds rate and are approaching a coin toss for the likelihood of a June cut.
Daly said that while she still sees a path to cut interest rates this year, “we’re just not there yet.”
She also emphasized that markets shouldn’t bank on three rate cuts, or a total of 75bps, in cuts for 2024. “Three rate cuts is a projection and a projection is not a promise,” Daly said.
She added that the timing and size of any cuts to the benchmark rate will depend on how quickly inflation subsides and whether or not the economic picture worsens.
Daly’s remarks followed similarly hawkish comments from Cleveland Fed President and fellow FOMC member Loretta Mester earlier on Tuesday, who ruled out voting for a rate cut at the May meeting and said the balance of risk was weighted firmly toward inflation.
