The odds of a 50 bps rate cut at the September 16-17 Federal Open Market Committee (FOMC) meeting slipped to 0% on Thursday, according to CME’s FedWatch tool. Yesterday, the odds rose to 5.7% after staying at 0% for several weeks as Treasury Secretary Scott Bessent voiced his support.
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Now, a Fed official is pushing back.
“Fifty sounds, to me, like we see an urgent—I’m worried it would send off an urgency signal that I don’t feel about the strength of the labor market,” said San Francisco Fed President Mary Daly in a Wall Street Journal interview. “I just don’t see that. I don’t see the need to catch up.”
Daly Warns of Labor Market Risks
After July’s nonfarm payroll data showed a steep downward revision to May and June’s figures, Daly said she stopped viewing the labor market as solid.
Daly called for two rate cuts this year in June. She still supports that view, although she could be on board for three cuts “if we saw more signs that the labor market was more precarious.” If inflation begins to heat up, she believes fewer cuts would be reasonable.
Track the FOMC and other key events with TipRanks’ Economic Calendar.
