MNI BRIEF: Fed's Daly Says Policy In Good Place, Need Clarity

The Federal Reserve will need more clarity on Washington's tariff policies to better understand the economic outlook and the landscape that businesses face before the central bank can make policy changes, San Francisco Fed President Mary Daly said Tuesday. 

"Overall, solid growth, solid labor market, inflation starting to edge down but a little concerned that it might pick back up again at least temporarily, from tariffs," she said at Brigham Young University in Utah. "We've got policy in a very good place right now. We've 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. So with growth good and policy in a good place, we have built a time and the ability to just be tread slowly and tread carefully." (See: MNI INTERVIEW: Tariffs Put Fed In Stagflationary Bind - Ex-CEA) 

Last week's tariff announcements gave more clarity about the outlook, but she said it is not complete clarity. "This is a place where all the uncertainty in the last two days, the thing I will tell you is jumping to a conclusion in a period of such uncertainty is a recipe for making a mistake. So as a policy maker, I don't make bets. I look at the data." 

Daly said she met with CEOs from her Fed region while on her trip in Utah. "What I saw today in the CEO roundtable is a lot of resiliency, a lot of planning, a lot of agility, a lot of ability to manage with whatever's in front of them. But overall, I walked away with a good feeling that business was still going. And the hard data we've been getting in the published data are not a misread of what the underlying momentum is," Daly said.