Federal Reserve Cuts Interest Rates to Support Economy

San Francisco Fed President Mary Daly supports further interest rate cuts to stabilize the U.S. economy, citing a downshift in the labor market and inflation nearing the 2% target. She predicts one or two more quarter-point cuts before year-end, despite some dissent among other Fed members. The recent half-percentage-point cut aimed to support job growth as the unemployment rate rises and inflation decreases to 2.2%. However, consumers are still facing high borrowing costs, with mortgage rates increasing since the cut, primarily due to rising 10-year Treasury yields. While the rate cut has prompted some renewed interest from lenders, businesses are cautious about committing to new projects. Overall, the Fed's actions reflect a balancing act between managing inflation and supporting employment amid evolving economic conditions.