Federal Reserve Bank of San Francisco President Mary Daly said in a Bloomberg Television interview that it remains “reasonable” for the U.S. central bank to deliver two interest-rate cuts this year, even as inflation continues to run above the 2% target. Daly insisted the Federal Open Market Committee should not “lower rates pre-emptively,” arguing that the timing of a move in July or September is less important than ensuring price pressures are on a sustained downward path. Daly noted that June consumer-price data showed tariffs beginning to push up goods inflation but added that other components are easing and the overall impact of the 145% levy on Chinese imports may prove “more muted than we thought.” She said policy is already “modestly restrictive,” with current rates “higher than the neutral rate pre-pandemic,” and projected that the long-run neutral rate will likely settle at 3% or higher. The San Francisco Fed chief characterised the economy as enjoying “solid growth” and a resilient labour market, while acknowledging that consumer spending is slowing “but not falling off a cliff.” Keeping policy too tight for too long, she warned, could create unnecessary job-market weakness. Daly’s remarks followed comments from New York Fed President John Williams, who cautioned that the economic effects of tariffs are “only just starting,” and preceded an interview with Atlanta Fed President Raphael Bostic, who told the Wall Street Journal the outlook remains “highly uncertain” and that the economy’s adjustment to tariffs could take several months. Together, the officials signalled that while the Fed still expects to ease later in 2025, it will proceed carefully as it assesses the inflationary consequences of the new trade barriers.