San Francisco Fed President Mary Daly says the Federal Reserve has struck a sound balance between its dual mandates of maximum employment and price stability.
Speaking at a weekend economics conference, she emphasized the need for monetary policy to remain flexible and responsive to changing economic conditions while maintaining equal attention to both goals. Daly argued that steering policy requires being attentive to incoming data and willing to adjust course as labor market and inflation dynamics evolve.
The comments follow the Fed’s recent decision to hold the target federal funds rate at 4.25%–4.50%. Officials remain split over the timing of potential rate cuts. Some policymakers, such as Christopher Waller, have suggested cuts could begin as early as July, but Daly indicated she expects reductions to be more likely in the fall. She highlighted that the timing will depend on how inflation and employment indicators move in the coming months.
Daly also urged central banks to communicate with humility about the uncertainties inherent in forecasting the economy. She said clear, candid communication helps manage expectations, but acknowledged that policymakers must be ready to revise their outlooks when new data warrant changes.
Overall, Daly portrayed the Fed as balancing its objectives by monitoring a range of indicators and remaining prepared to act if inflation fails to converge toward target or if labor market conditions deteriorate. Her remarks underscore a cautious approach: neither ruling out rate cuts nor committing to an imminent easing, while prioritizing steady progress on both employment and price stability.