(Wall Street Journal) — San Francisco Fed President Mary Daly pushed back against the need for an interest-rate cut of a half percentage point, or 50 basis points, at the Federal Reserve’s September meeting.

“Fifty sounds, to me, like we see an urgent-I’m worried it would send off an urgency signal that I don’t feel about the strength of the labor market,” Daly said in an interview Wednesday. “I just don’t see that. I don’t see the need to catch up.”

Daly supported the Fed’s decision last month to hold rates steady. She has since indicated she would support a September cut because inflation pressures haven’t been as stiff as feared and job-market conditions have softened.

Daly said she had stopped describing the labor market as solid after the July payrolls report, which sharply revised down employment gains for previous months. Other data suggest layoffs remain low, but people who lose jobs spend longer out of work.

The labor market “is not bad right now,” but “you know the direction of change is going the wrong way,” she said. “We can’t simply ignore that it is softening.”

“Policy is likely to be too restrictive for where the economy is headed. So for me, that calls for recalibration,” she said. Daly favors moving gradually to a more neutral setting “over the next year or so.”

In June, Daly penciled in two rate cuts this year. She said that’s still reasonable but cuts at all three remaining meetings this year could be appropriate “if we saw more signs that the labor market was more precarious.” Fewer cuts would be warranted if there were signs of serious strength in inflation, she said.

The relatively muted response of goods inflation to higher tariffs suggests the risk of a serious psychological effect from a surge in prices had diminished, Daly said.

She said businesses have found ways to absorb tariff costs rather than passing them to consumers. She likened the process to a very small leak in a pipe where costs get spread across supply chains, as opposed to a bursting pipe that causes a flood.