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Fed's Daly says a rate cut in the fall could be appropriate

BY Reuters | ECONOMIC | 06/20/25 04:26 PM EDT

(Reuters) -The fundamentals of the U.S. economy are moving to where an interest rate cut may be necessary, San Francisco Federal Reserve Bank President Mary Daly said on Friday, though she signaled a July rate cut would probably be too early.

"Unless we saw a faltering in the labor market that was meaningful and we thought it would be persistent then I would say the fall looks more appropriate to me," Daly said in an interview on CNBC.

At the same time, she said, what is a current softening of the labor market could easily turn into a weakening, "and we can't allow for that to happen because we're waiting for inflation to pop up just around the corner."

(Reporting by Ann Saphir; Editing by Chris Reese)

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In general the bond market is volatile, and fixed income securities carry interest rate risk. (As interest rates rise, bond prices usually fall, and vice versa. This effect is usually more pronounced for longer-term securities.) Fixed income securities also carry inflation risk and credit and default risks for both issuers and counterparties. Unlike individual bonds, most bond funds do not have a maturity date, so avoiding losses caused by price volatility by holding them until maturity is not possible.

Lower-quality debt securities generally offer higher yields, but also involve greater risk of default or price changes due to potential changes in the credit quality of the issuer. Any fixed income security sold or redeemed prior to maturity may be subject to loss.

Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.

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