Fed’s Daly says employment, inflation risks roughly in balance

Federal Reserve Bank of San Francisco President Mary Daly said she sees the central bank’s monetary policy stance as “in a good place” currently, with risks to its U.S. employment and price stability mandates as roughly equal.

“We have to navigate policy not only depending on how the environment evolves, but also with keeping those two objectives in mind,” Daly said Sunday while answering questions after a speech prepared for the Western Economic Association International’s 100th Annual Conference in San Francisco.

Last week, the Fed held interest rates steady at 4.25%–4.5% and signaled uncertainty remains elevated about the effects of President Trump’s tariffs on the economy. Officials see slower economic growth, higher inflation and rising unemployment, and hold divided views on the outlook for interest rates, according to their latest projections.

Fed Governor Christopher Waller said Friday the central bank could begin cutting rates as soon as July. Daly, speaking the same day, said she sees a move as more likely in the fall.

In her speech Sunday on central bank communications, the San Francisco Fed chief didn’t comment on the outlook for the economy or policy. She said public guidance on interest rates sometimes “comes with a price.”

Officials should give “guidance about what we know, humility about what we don’t, and a commitment to respond to the world we get, even if it is different from the one we expect,” Daly said.