Fed Official Pushes Back on Pre-emptive Policy Moves

Federal Reserve officials wrapped up their final meeting of 2024 with splits surfacing over how many more interest rate cuts they should make given strong economic growth, lingering inflation and huge uncertainty ahead of Donald J.Trump’s return to the White House.Weeks later, they unanimously pressed pause on rate cuts and now appear unified in their view that the central bank should tread carefully and take its time to see how the economy is evolving under a new administration.Mary C.

Daly, president of the Federal Reserve Bank of San Francisco, reaffirmed that approach in an interview on Monday, saying the central bank does not “need to be pre-emptive at this point.”“We have policy calibrated for this economy and the one we expect to have, and we’ve got time now to be actively watching to see what else is done,” she said.The merits of that strategy were on full display on Monday after Canada and Mexico, two of America’s top trading partners, narrowly avoided steep tariffs in an 11th-hour deal with President Trump.The prospects of another trade war — combined with large-scale deportations, reduced regulation and lower taxes — have upended economists’ expectations.They have also muddied expectations about how much more the Fed can lower rates after reducing them by a full percentage point last year.

Ms.Daly said she was focused on the “net effect” of Mr.

Trump’s policies, rather than assessing each one individually.We are having trouble retrieving the article content.Please enable JavaScript in your browser settings.Thank you for your patience while we verify access.If you are in Reader mode please exit and log into your Times account, or subscribe for all of The Times.Thank you for your patience while we verify access.Already a subscriber? Log in.Want all of The Times? Subscribe....