South Korea Warns Won Is Undervalued, Boosts FX Coordination With Japan 
US Dollar Rises as Fed Rate Outlook Stays Hawkish, Euro Slips and Yen Near 40-Year Low 
U.S. Dollar Drops as Weak Jobs Data Boosts Fed Pause Bets, Yen Jumps on Intervention Talk 
China Sets 1.25% Overnight Reverse Repo Rate Below Market Expectations 
US Resumes Dollar Shipments to Iraq After Months-Long Suspension 
New Zealand Unemployment and Inflation Debate Intensifies Ahead of 2026 Election 
Turkey Vehicle Sales Fall 11.4% in June as Auto Market Weakens 
Oil Prices Rise as U.S.-Iran Talks Keep Geopolitical Risks in Focus 
US Stock Futures Hold Steady Ahead of June Jobs Report as Fed Rate Outlook Remains in Focus 
Taiwan Central Bank Likely to Keep Interest Rates Unchanged Through 2027 
ECB Keeps July Rate Options Open Amid Iran War Energy Price Risks 
Oil Prices Steady as U.S.-Iran Talks Ease Supply Fears Ahead of Holiday Weekend 
Malaysia Central Bank Moves to Support Ringgit Amid Foreign Fund Outflows 
RBA Expected to Hold Interest Rates at 4.35% as Markets Watch AUD/USD and ASX 200 
Asian Stocks Mixed as South Korea Slides on Profit-Taking, Japan and China Gain on Strong Factory Data 
BOJ Hawk Signals Faster Interest Rate Hikes Amid Inflation Risks 
India Manufacturing PMI Slows in June as Demand Weakens Despite Lower Cost Pressures 
San Francisco Federal Reserve President Mary Daly said the Federal Reserve remains in a difficult position as it weighs the next move on interest rates, citing persistent inflation risks, a resilient labor market, and the uncertain economic impact of artificial intelligence.
Speaking at a Banco de España conference in Santander, Spain, on Thursday, Daly described current U.S. monetary policy as "slightly restrictive" but emphasized that the outlook remains highly uncertain. She said the rapid expansion of AI-related investment and steady employment conditions make it challenging to determine whether the Fed should adjust policy in the coming months.
Daly noted there are competing economic scenarios the central bank must consider. Inflation could remain stubbornly high, requiring policymakers to keep fighting price pressures. At the same time, economic growth could weaken if business investment slows as companies wait to see stronger returns from AI-related spending.
She added that the recent decline in oil prices following the Iran ceasefire is a positive development for both consumers and the broader U.S. economy, potentially easing some inflationary pressure.
Her comments came shortly after the U.S. Bureau of Labor Statistics reported that job growth slowed sharply last month. Following the data release, financial markets scaled back expectations for a Federal Reserve interest rate increase later this month and reduced the likelihood of another rate hike in September.
Daly also referenced discussions at the European Central Bank's annual conference in Sintra, Portugal, where Federal Reserve Chair Kevin Warsh reiterated the central bank's commitment to bringing inflation back to its 2% target. Warsh said AI is already reshaping the economy by boosting demand in the near term while eventually increasing supply, creating opposing effects on inflation.
According to Daly, the uncertainty surrounding AI's long-term influence is a key reason for the Fed to remain patient.
"When the world is changing quickly, you don't want to react too quickly," Daly said, stressing that carefully evaluating incoming economic data will help the Federal Reserve make better policy decisions.
