Fed’s Daly Cautiously Optimistic on Inflation, Trump Pressures Powell for Rate Cuts

San Francisco Fed President Mary Daly expressed measured relief after April’s PCE inflation data showed a 2.1% annual increase—the slowest pace in four years. "This provides breathing room for American consumers," Daly remarked during a Fox Business interview, while cautioning that policymakers require more comprehensive data before considering rate adjustments.

The Fed official signaled openness to two potential rate cuts in 2025, contingent upon sustained disinflation and economic stability. Monetary policy remains "modestly restrictive" until inflation reliably approaches the 2% target, Daly emphasized, noting the central bank’s data-dependent approach allows flexibility in either direction.

Meanwhile, political pressures intensified as former President Donald TRUMP summoned Fed Chair Jerome Powell to the White House. The meeting followed weeks of public and private demands from Trump for immediate rate reductions, creating an unusual intersection of monetary policy and election-year politics.