San Francisco Federal Reserve Bank President Mary Daly has indicated that recent cooler inflation readings are encouraging, and she anticipates further easing in both price pressures and the labor market to justify interest rate cuts. While Daly sees it as likely that policy adjustments will be warranted, she remains uncertain about the exact timing. She suggests that one or two interest rate cuts this year, as projected in the June Fed policymaker forecasts, could be appropriate if inflation continues to cool, though progress may be uneven. Daly’s comments reflect a cautious optimism about the economic outlook and a willingness to consider rate cuts in response to improving economic conditions.