SF Fed President Daly Signals Potential for More Rate Cuts

Cites concerns over labor market vulnerabilities as reason for further easing

Published on Feb. 6, 2026

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Federal Reserve Bank of San Francisco President Mary Daly said on Friday that one or two more interest rate cuts may be needed to address vulnerabilities in the labor market. Daly had supported the Fed's decision last week to lower rates, and she indicated that further easing could be warranted if labor market conditions continue to show signs of weakness.

Why it matters

Daly's comments suggest the Fed may be inclined to take a more dovish stance on monetary policy in the coming months, potentially cutting rates further to support the labor market and broader economy. This would mark a shift from the Fed's previous stance of holding rates steady after a series of cuts in 2025.

The details

In her remarks, Daly cited growing concerns over labor market vulnerabilities as a key factor that could prompt the Fed to cut rates again. She did not provide specifics on what those vulnerabilities are, but the comments suggest the central bank is closely monitoring employment data and may act preemptively to shore up the job market.

  • Daly made the comments on Friday, February 6, 2026.

The players

Mary Daly

President of the Federal Reserve Bank of San Francisco.

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What they’re saying

“One or two more interest-rate cuts may be needed on the premise of vulnerabilities in the labor market.”

— Mary Daly, President, Federal Reserve Bank of San Francisco (Seeking Alpha)

What’s next

Investors will be closely watching for any further signals from the Fed and other policymakers about the potential for additional rate cuts in the coming months.

The takeaway

Daly's comments suggest the Fed may be willing to take a more accommodative stance on monetary policy to support the labor market, even if broader economic conditions appear stable. This could have implications for financial markets and the trajectory of the economy in 2026.