San Francisco Fed President Mary Daly said tariff pass-through is fading and the labor market is not a major inflation driver, as investors watch July U.S. inflation data and September Federal Reserve policy signals.
San Francisco Fed President Mary Daly said tariff-related inflation effects appear to be fading and that current labor market conditions are not contributing significantly to inflation pressures. Her comments align with recent Federal Reserve research that said the largest tariff pass-through into prices had already occurred by early 2026, and with the Fed’s broader view of a stable jobs backdrop, including unemployment at 4.2% and improving private payrolls. With inflation still above the central bank’s 2% target, Daly’s remarks support expectations that the Federal Reserve will keep a restrictive policy stance for now while investors focus on the Bureau of Labor Statistics’ July inflation release and upcoming meetings, particularly in September, for clues on future rate adjustments.