Mary Daly, who runs the San Francisco branch of the Fed, said on Friday that while the latest inflation figure brings some “relief” to Americans, the central bank isn’t done yet.
The comment came during her appearance on Maria Bartiromo’s Wall Street on Fox Business, where she was talking about the 2.1% rise in April’s personal consumption expenditures (PCE) price index, which is the Fed’s preferred inflation measure. It was the slowest annual increase in four years.
“That’s good relief for American consumers,” Mary said, but she also warned that this number doesn’t tell the whole story. “It’s an incomplete picture of what we have to look at as policymakers,” she said. She added that looking ahead, inflation still carries risks, and the Fed isn’t ready to make any sudden moves.
Mary made it clear she still thinks monetary policy is in a good place, and she’s okay with two rate cuts in 2025, if inflation keeps cooling and the economy stays steady. “We can actually move one way or another as the data unfolds,” she said.
But she also added, “You want to keep the policy rate modestly restrictive for now until we are sure that inflation is going to get to that 2%.”
Trump met Fed’s Powell at the White House to demand lower rates
The day before Mary gave her TV interview, President Donald Trump met with Fed Chair Jerome Powell at the White House. This came after weeks of Trump pressuring the Fed to cut rates, both online and behind closed doors. Trump invited Powell to discuss “economic developments including for growth, employment, and inflation,” according to Reuters.
The Fed later confirmed the meeting happened, but said Powell didn’t give any policy guidance. He only repeated that any future changes to interest rates would depend entirely on economic data. The statement stressed that Powell and the rest of the central bank will continue to base decisions on “careful, objective, and non-political analysis.”
But Trump is clearly not buying that. He’s been slamming Powell for weeks on his Truth Social account, accusing the Fed of holding back growth by keeping interest rates too high. On May 17, he posted, “THE CONSENSUS OF ALMOST EVERYBODY IS THAT, ‘THE FED SHOULD CUT RATES SOONER, RATHER THAN LATER.’ Too Late Powell, a man legendary for being Too Late, will probably blow it again – But who knows???”
White House Press Secretary Karoline Leavitt confirmed that Trump didn’t hold back in private either. “The president did say that he believes the Fed chair is making a mistake by not lowering interest rates,” Karoline told reporters. “It’s putting us at an economic disadvantage to China and other countries.”
The Federal Open Market Committee (FOMC) hasn’t cut rates since December, just before Trump returned for his second nonconsecutive term. Meanwhile, Trump is rolling out new tariffs that could increase inflation, complicating things for a Fed trying to manage prices while keeping the economy afloat.
So far, the central bank is standing firm. Mary’s comments show that officials are in no rush to change course. The April PCE report may have been good news, but the Fed is still watching the road ahead — and they’re not done steering yet.
