Fed's Daly says she keeps a 'very open mind' on interest rates and she leans toward more rate cuts in 2026, hard to note if that's one cut or two, according to reports

• Supported Fed's decision last week to hold rates steady, but thought case could have been made for a cut.
• To cut, you'd need to be more confident on inflation, or see labour market as more challenged than data currently shows.
• Workers feel they are walking on a 'knife's edge'.
• If job market goes from 'no firing' to "some firing,' Fed may need to cut rates.
• Sees more vulnerability in labour market than on inflation.
• would be comfortable holding rates steady for longer if inflation kicks back up.

Fed's Daly's remarks indicate a slightly dovish stance, suggesting potential for rate cuts in 2026, contingent on job market vulnerabilities rather than inflation concerns. Her support for the recent hold on rates paired with a willingness to consider future cuts highlights uncertainty, which may influence market expectations on Fed policy and potentially weaken the USD if interpreted as a sign of caution regarding economic conditions.