Federal Reserve Bank of San Francisco President Mary Daly: The Federal Reserve needs to maintain flexibility in its policies to respond to risks.

MaticHoleFiller · 2026-03-24T02:35:17+00:00

San Francisco Federal Reserve President Mary Daly emphasized that the Federal Reserve needs to maintain flexibility to address evolving risks. She pointed out that the U.S. economy faces two scenarios: if Middle East conflicts are quickly resolved, the impact will be limited, but otherwise it could increase risks of inflation and economic slowdown. She believes the best communication approach is to focus on restoring price stability and supporting employment.

MaticHoleFiller

2026-03-24 02:35:17

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San Francisco Federal Reserve Bank President Mary Daly posted on X that the Fed needs to remain flexible to respond to rapidly evolving risks.

Daly added that, in an uncertain environment, there is no single most likely path.

She stated that the U.S. economy faces at least two possible scenarios:

If the Middle East conflict eases quickly, with oil and energy prices falling back, the impact on the U.S. economy will be short-lived and limited.
If the conflict persists longer, disrupting energy supplies, related cost pressures could continue, increasing the risks of rising inflation, slowing economic growth, and weakening the labor market.

Daly said that in an environment full of uncertainty, providing too much forward guidance may reduce rather than enhance transparency.

She emphasized that regardless of how the economy evolves, focusing on restoring price stability and supporting full employment is the best communication approach and appropriate policy.

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