Mary Daly, who runs the Fed’s San Francisco chapter, said Friday that the latest inflation figures will “breathe” for Americans, while the central bank is not finished yet.
Comments came during her appearance Wall Street in Maria Baltilomo Fox Business was talking about the Fed’s priority inflation measure, a 2.1% increase in the Personal Consumption Expense (PCE) price index in April. This was the slowest annual increase in four years.
“It’s a good relief for American consumers,” Mary said, but she also warned that the number doesn’t speak the whole thing. “It’s an incomplete picture of what we have to look at as policy makers,” she said. She added that looking ahead, inflation remains risky and that the Fed is not ready to make a sudden move.
Mary revealed that she believes monetary policy is in a good place. If inflation continues to cool and the economy is stable, two interest rate cuts in 2025 are fine. “As the data unfolds, we can actually move in some way,” she said.
However, she added, “I would like to continue to conservatively limit the policy rate for now until I am certain that inflation will reach that 2%.”
Trump met Fede’s Powell at the White House to request a lower fee
The day before Mary conducted a television interview, President Donald Trump met Fed Jerome Powell Chair at the White House. This comes after weeks of Trump pressured the Fed to cut both online and closed doors. According to Reuters, Trump invited Powell to discuss “economic development, including growth, employment and inflation.”
The Fed later confirmed that the meeting took place, but Powell said he did not give policy guidance. He has only repeated that future changes in interest rates will be entirely dependent on economic data. The statement emphasized that Powell and the rest of the central bank will continue to make decisions based on “a prudent, objective and apolitical analysis.”
But Trump clearly didn’t buy it. He has been blaming Powell on his true social account for weeks, denounces FRED by keeping interest rates high. On May 17, he said, “The consensus among almost everyone is that ‘The Fed should cut fees faster than later’. Powell is a legendary man for being too late, but will probably blow again – but who knows? ”
White House spokesman Caroline Leavitt confirmed that Trump is not personally holding back either. “The president said he believes the Fed’s chairman is making a mistake by not lowering interest rates,” Carolyn told reporters. “It puts us at an economic disadvantage against China and other countries.”
The Federal Open Market Committee (FOMC) has not cut interest rates since December, just before Trump returns to his second term. Meanwhile, Trump has rolled out new tariffs that could increase inflation, complicating things for the Fed, who are trying to manage prices while the economy is floating.
So far, the central bank has been fixed. Mary’s comments show that officials will not quickly change courses. The April PCE report may have been good news, but the Fed is still looking ahead – and they haven’t steering yet.