San Francisco Federal Reserve President Mary Daly reiterated on Thursday it is "reasonable" to expect two interest rate cuts before the end of this year, particularly with the impact of President Donald Trump's tariffs looking more muted than originally expected.

Federal Reserve governor Christopher Waller made his strongest call yet for a rate cut in July as he again argued that any inflation from tariffs would be temporary, underscoring a new divide within the central bank.

Christopher Waller, a potential contender to be the next chair of the central bank, said the Federal Reserve should not wait for the labor market to weaken to reduce interest rates.