Federal Reserve's Daly: The labor market is slowing down, tariffs only have a short-term impact, and the Federal Reserve will soon cut interest rates

ChainCatcher news, according to San Francisco Fed President Daly on Wednesday, considering the slowdown in the labor market and her assessment that tariffs pose only a short-term threat to inflation, she believes the Fed will need to cut interest rates soon. "Without tariffs, inflation has been gradually declining, and with the economic slowdown and monetary policy still being restrictive, inflation should continue to decline."

She added that while tariffs will push up inflation in the short term, they are unlikely to have a lasting impact. Meanwhile, the labor market has already weakened. "I think further slowdown would be concerning; once the labor market shows signs of strain, it tends to decline rapidly and severely. All of this means that we are likely to need to adjust policy in the coming months."