Fed’s Daly says need to cut rates because economy slowing, inflation falling

Federal Reserve Bank of San Francisco President Mary Daly

• Fed
  needs to cut policy rate because inflation is falling and the economy
  is slowing
• On size of September Fed rate cut, “we don’t know yet.”
• Daly says she needs more data, including Friday’s job market
  report and CPI.
• Fed must calibrate policy to the evolving economy, Daly says.
• Labor market has softened but is still healthy, and that “has
  to be sustained and protected.”
• Hard to find evidence that labor market is faltering.
• Overly tight policy could mean additional, unwelcome labor market
  slowing.
• We have not restored price stability; inflation is still people’s
  number one concern.
• Businesses are being “frugal” on hiring, but not yet
  “dusting off their layoff manuals.”
• We are at an inflection point in the economy, and data will be
  volatile.
• Fed can take aggressive action when the outlook is clear, but the
  current outlook is uncertain

This article was written by Eamonn Sheridan at www.forexlive.com.