Mary Daly on monetary policy
From Fed's Daly Says Forward Guidance Could Be Misleading · · Bloomberg Technology
“We don't know how the economy is going to play out. We have, as we've been talking about this tremendous possibility with AI, but we have the same time, the war in Iran that is, um, with an uncertain end, which has pushed prices up and fertilizer prices, which have filtered into food prices. And right now those are fairly contained. And if you look at the futures market for oil. It's $80 a barrel by the end of the year. But, you know, we have to think about that. And so right now policy's in a good place. We are prepared to respond either way whatever the economy brings. But I think giving more forward guidance about what's possible could be misguiding in the end, because we just have to wait for the economy to evolve.”
On , Mary Daly, President at Federal Reserve Bank of San Francisco, spoke about monetary policy during Fed's Daly Says Forward Guidance Could Be Misleading on Bloomberg Technology.
About Mary Daly
Mary Daly, President of the Federal Reserve Bank of San Francisco, said during several appearances in April through June 2026 that while there is "tremendous investment" in artificial intelligence by businesses, widespread productivity gains from AI are not yet visible in economic data. She described the next year as "the big test" for whether those gains will materialize, adding that firms are still in the early stages of learning the technology and changing their business processes. Daly drew a comparison to the adoption of electrification, noting that sustained productivity gains historically required business process change rather than simply adding new technology to existing operations. She said she is not seeing evidence of financial stability concerns from rising markets or from data center financing, stating that companies are investing "a lot of their own resources" into those projects. On monetary policy, Daly said policy is currently "in a good place" and that the right decision from the May 2026 Federal Open Market Committee meeting was to hold the rate steady. She said providing more specific forward guidance about future rate moves "could be misguided" because of economic uncertainty, and she emphasized the need to balance the risks of overreacting and underreacting to incoming data. Daly stated that inflation remains her "number one priority," pointing to elevated energy and food prices as key drivers, and she said she does not see confusion among the public about the Fed's commitment to price stability. She also expressed that she looks forward to the "real discussions" that incoming FOMC Chair Kevin Warsh has said he wants to have.