Mary Daly: The interest rate cut in October was a strategic move.

Interest Rate Cut Decision in October

The Federal Reserve (Fed) has lowered the policy interest rate by 25 basis points, bringing it to the range of 3.75-4%, in line with market expectations. This decision is being interpreted as one of the critical steps that will determine the trajectory of the economy. San Francisco Fed President Mary Daly emphasized that the interest rate cut made in October was a prudent step given the current economic conditions.

Statements Regarding the December Interest Rate Decision

Daly stated that monetary policy should still remain moderately tight. Furthermore, she expressed an open-mindedness regarding the December interest rate decision. This situation serves as an important indicator for investors and market analysts. Daly's remarks provide clues about the Fed's future direction.

Inflation and Market Dynamics

The total 50 basis points of interest rate cuts carried out this year have positioned the Fed more favorably. However, Daly pointed out that inflation still persists above the target, asserting that they need to continue working to mitigate price pressures. At this point, factors such as fluctuating energy prices and supply chain issues were highlighted for their impact on inflation.

Differences of Opinion Within the Fed

Daly also noted that there have been no significant divergences of opinion within the Fed compared to previous periods. This could be an important factor for potential interest rate increases or other monetary policy actions. Overall, Daly's assessments create content that warrants serious attention from investors and economists.