Fed's Daly says rate cuts are helping to offset headwinds

FILE PHOTO: San Francisco Federal Reserve Bank President Mary Daly poses at the bank’s headquarters in San Francisco, California, U.S., July 16, 2019. REUTERS/Ann Saphir.

(Reuters) - San Francisco Federal Reserve President Mary Daly said on Monday she supported the U.S. central bank’s two interest rate reductions this year to counter headwinds to the U.S. economy, including weaker global growth, trade tensions and geopolitical uncertainty.

The U.S. economy is in a “good place,” Daly said in Salem, Oregon, using the same phrase as Fed Chair Jerome Powell and Fed Vice Chair Richard Clarida. But trade and other uncertainties are percolating through to businesses, slowing their spending; and easing monetary policy “partially offsets” that decline and keeps the U.S. economy from slowing overall, Daly said.

The Fed last week cut its overnight policy rate by a quarter of a percentage point for the second time this year, and now targets a range between 1.75% and 2.0%. The decision drew three dissents out of 10 total votes. Daly is not a voter on policy this year.

Reporting by Ann Saphir; Editing by Dan Grebler