San Francisco Fed President: Worried about the sudden deterioration of the job market, support rate cut in December.

Mary Daly, the President of the Federal Reserve Bank of San Francisco, stated that she supports cutting interest rates at the December meeting of the Federal Reserve. She believes that the possibility of a sudden deterioration in the job market is higher than that of a sharp increase in inflation, and it is more difficult to address. In an interview with the media on Monday, she pointed out that the labor market is now very fragile and there is a risk of nonlinear changes. She expressed uncertainty about whether authorities could respond in advance. In comparison, the risk of an inflation outbreak is lower because the tariff-driven cost increase is lower than earlier expectations. Some analysts believe that Daly's remarks are significant because she rarely deviates from the position of the Federal Reserve Chairman Powell in public. Daly only gained voting rights on the Federal Open Market Committee (FOMC) in 2027. Daly emphasized that she still believes that the Federal Reserve can reduce the inflation rate back to the 2% target range without pushing up the unemployment rate, and failure to achieve this goal would constitute policy failure. More and more Federal Reserve officials have recently expressed opposition or concerns about further interest rate cuts, believing that high inflation is caused by goods affected by tariffs and the domestic service industry. They worry that cutting interest rates too quickly and economic growth picking up next year will put the Federal Reserve in a dilemma. Daly, on the other hand, believes that the Federal Reserve should not delay rate cuts due to concerns about the need to reverse policy in the future. The rare disagreements among Federal Reserve officials reflect real uncertainty rather than decision-making failure. If "everyone agrees at this moment," the central bank will fall into the error of groupthink. Daly stated, "Our responsibility is not to achieve consensus."