Interest rate message from two Fed officials: We expect three rate cuts

Cleveland Fed President Loretta Mester and San Francisco Fed President Mary Daly have said they expect three rate cuts this year. Fed officials Loretta Mester and Mary Daly signaled Tuesday that three rate cuts were still likely in 2024, while Mester hinted in June that one rate cut was possible. Cleveland Fed President Loretta Mester said the inflation picture “hasn’t changed much” despite warmer-than-expected numbers at the beginning of 2024. “But I need to see more data to build my confidence. Some monthly data will give us a better idea of whether the disinflation process has stalled or whether the early-year data reflects a temporary deviation from the path to a return to price stability,” Mester said. Mester said she still thinks three rate cuts this year are appropriate, but she said it’s “a close call” whether fewer are needed. San Francisco Fed President Mary Daly also called three cuts in 2024 “a very reasonable baseline,” but added that “we still have a lot of work to do.” Mester and Daly are the latest Fed officials to offer assurances about the number of cuts in 2024, while also making it clear that the Fed is in no rush to ease monetary policy.