Recently, Mary Daly, the president of the Federal Reserve Bank of San Francisco, made a series of eye-catching remarks, suggesting that the Fed may soon enter a rate-cutting cycle. In a speech on August 5, Daly emphasized that given the increasingly evident signs of a weak labor market and the fact that inflation pressures from tariffs do not seem to be persistent, the timing for a rate cut may be close.

Daly stated that she is willing to wait for another decision-making cycle, but she will not indefinitely postpone action. While this statement does not mean that a rate cut in September is a done deal, she made it clear that every upcoming meeting will become an important moment for considering policy adjustments.

Regarding the specific interest rate cuts, Daly believes that two cuts of 25 basis points each within the year remain a reasonable adjustment plan. She emphasized that the focus is not on whether there will be a rate cut, but on whether actions will be taken in both September and December.

Daly further elaborated on the possible direction of future policies. She pointed out that if inflation rises and shows signs of spreading, or if the labor market shows signs of recovery, then the number of rate cuts may be less than two. However, she believes that a more likely scenario is that more than two rate cuts will be necessary. Especially if the labor market remains weak and inflationary pressures do not spill over, the Fed should be prepared for more rate cuts.

These remarks reflect that the Fed is closely monitoring changes in the labor market and is using this as an important basis for formulating monetary policy. At the same time, it also shows the Fed's efforts to seek a balance between inflationary pressures and economic growth. As the global economic situation continues to change, the Fed's policy direction will undoubtedly remain a focal point of market attention.