Exclusive-Fed's Daly says flat progress on inflation hurts confidence in rate cut outlook
(Reuters) -San Francisco Federal Reserve Bank President Mary Daly still sees two interest-rate cuts this year as a "reasonable" projection, but the recent plateauing of inflation progress gives her less confidence in that outlook, and with the labor market solid and the economy still growing, policymakers can wait to reduce rates until they assess how businesses will adjust to tariff costs. Speaking by phone in an initial interview late Thursday from Fairbanks, Alaska, Daly said local business and community leaders there expect that tariffs will increase their costs and are strategizing about how to find workarounds, but they also expect some levies to be relaxed over time, or to allow for some exceptions. Meanwhile inflation has come down from its peak, and the Fed's interest-rate cuts last year mean that projects businesses had put on hold are now "penciling out," and they are going ahead with them, she said.