San Francisco Fed President expects two rate cuts in 2025

Mary Daly, San Francisco Federal Reserve Bank President, sees a possibility of two interest rate cuts this year. Besides, she believes price effects from import duties may be weaker than expected.

Some US companies are negotiating splitting up tariff costs in order not to pass on much of them to consumers. In addition, inflation is approaching the Fed’s 2% target, Daly says. 

She also highlights the resilience of the US economy and notes that consumer spending is moderating, but not yet declining.

Meanwhile, St. Louis Fed President Alberto Musalem believes it is too early to know whether the tariff-related price bump will be one-time or will prove more sustained. He expects the impact of the import duties to show up more in inflation data starting in the summer months or September.

So far in 2025, the Fed has kept borrowing costs unchanged. At the same time, officials have divided over the number of rate cuts in the second half of the year.

The Fed's next meeting will be held on July 29–30. Investors expect monetary easing to start in September, Bloomberg reports.