San Francisco Fed's Mary Daly Says Central Bank Should 'Tread Slowly And Tread Carefully'

As President Donald Trump initiated a tariff plan that many critics label stagflationary, key figures in the Federal Reserve, including Mary Daly, president of the Federal Reserve Bank of San Francisco, signaled that the central bank might delay further rate cuts.

Daly, speaking at a moderated discussion at Brigham Young University on Tuesday, said she is comfortable with current interest rate levels, reported Bloomberg.

“We cut the interest rate by 100 basis points last year. That puts policy in a good place to stay modestly restrictive — keep inflation coming down — but not so restrictive that the economy is vulnerable,” Daly told attendees.

Daly participates in the rate-setting Federal Open Market Committee as a rotating voting member. The Missouri native served on the committee in 2024 and is not currently a sitting member.

Daly said she thinks the committee should be careful when deviating from its current path.

“So, with growth good and policy in a good place, we’ve built the time and the ability to just tread slowly and tread carefully,” she said.

Meanwhile, Fed Chair Jerome Powell has rebuked Trump’s overtures to policymakers to cut rates. Speaking at the Society for Advancing Business Editing and Writing conference on April 4, Powell said it’s “too soon” to assess a change in policy given the tariffs’ impact on inflation.

According to the Federal Reserve Bank of St. Louis, the federal funds rate is currently 4.33%, lower than the 2024 peak of 5.33% but substantially higher than the low interest rate environment observed in the 2010s.

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