Home > Dynamic > Interest rate cut co...

Interest rate cut coming? Fed officials "like" CPI report: policy may be adjusted

2024-07-12

424

On Thursday (July 11th) local time, Mary Daly, president of the Federal Reserve Bank of San Francisco, said that given the latest employment and inflation data, some adjustments to interest rates may be reasonable.

Data released in early New York City showed that the annual rate of unadjusted CPI in June was 3.0%, lower than the market expectation of 3.1%, falling back to the lowest level since June last year; the monthly rate of seasonally adjusted CPI was -0.1%, the first negative value since May 2020.

Daly told the media in a conference call, "It is clear that the risks to our established two major goals of price stability and full employment have been better balanced, and monetary policy is working."

She added, "Based on the information we have received so far, including employment, inflation, GDP growth, economic outlook and other data, I think it is necessary to make some (monetary) policy adjustments."

The employment situation report released last week showed that the US unemployment rate unexpectedly rose to 4.1% in June, the highest since November 2021. Daly expects prices and the labor market to ease further, paving the way for the Fed's first rate cut.

Daly said, "When to relax restrictions has become our new focus, which is a fairly clear signal. Now you hear many of us, especially Chairman Powell, talking about the importance of the labor market, and no longer just talking about the need to reduce inflation."

She said that the central bank needs to take action before the unemployment rate rises sharply and before the inflation rate returns to the 2% target, otherwise it may unnecessarily harm workers and the economy. "It is still unclear when it is appropriate to adjust the policy."

Daly admitted that the future inflation process may be "bumpy", but it will cool down further. She also mentioned that the US economy seems to be moving in the direction of "one or two rate cuts this year", as policymakers predicted in June ("dot plot"), "which will be the appropriate path."

Daly pointed out that since the beginning of the year, the possibility of re-acceleration of inflation has weakened, but because it is difficult to get rid of high prices, the Fed is unlikely to cut interest rates as quickly as raising interest rates.

The above information is provided by special analysts and is for reference only. CM Trade does not guarantee the accuracy, timeliness and completeness of the information content, so you should not place too much reliance on the information provided. CM Trade is not a company that provides financial advice, and only provides services of the nature of execution of orders. Readers are advised to seek relevant investment advice on their own. Please see our full disclaimer.

CM Trade

As a world leading financial trading platform, CMtrade Provides comprehensive one-stop trading services and opportunities for traders.

[Products]

The platform provides over 32 kinds of popular financial products such as forex, precious metals, crude oil, indices, cryptocurrencies and more.

[System]

2 top trading systems CM Trade MT4 / CM Trade APP, powerful and easy to operate

[Service]

Comprehensive market news, professional market analysis, 7*24 hours online customer service

[Advantage]

Low cost, high leverage, flexible one-stop all day two-way trading.

[Authority]

Licensed and strictly regulated by authorities. Traders deposits are independently kept by the bank. Fast deposit and withdrawal. Fair, efficient and transparent trading environment.

Free Access
Daily Trading Strategy Download Now

CM Trade Mobile Application

Economics Calendar

Interest rate cut coming? Fed officials "like" CPI report: policy may be adjusted

Access to global trading markets anytime and anywhere