San Francisco Federal Reserve Bank President, Mary Daly, maintains her view that two interest-rate cuts this year are a reasonable prediction. Despite a strong labor market and steady economic growth, policymakers are inclined to delay rate reductions until they assess how businesses adapt to tariff expenses.

In a phone interview from Fairbanks, Alaska, Daly shared that local leaders anticipate tariff-related cost hikes and are formulating strategies to mitigate these increases. They believe that some tariffs may be eased over time or exceptions granted.

Daly noted a decline in inflation from its peak. She highlighted that interest-rate cuts by the Fed last year have spurred businesses to move forward with projects previously stalled.

Emphasizing the importance of patience, Daly expressed that current economic conditions do not necessitate hasty decisions. The Fed's policy rate was left steady at 4.25%-4.50%, with most officials indicating that two rate cuts by the end of the year might be appropriate, in line with the signal given in December.

Daly explained her unchanged stance since last year, citing the need for more data before altering projections. She stressed the importance of allowing the new administration and affected industries time to grasp and adapt to tariff changes, while also understanding their impact on prices, growth, and the labor market, as the full extent of the effects remains uncertain.