Fed's Daly Says Policy in 'Good Place' as Labor, Inflation Improve

San Francisco Fed president sees opportunity to assess economic impacts ahead

Published on Feb. 26, 2026

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San Francisco Federal Reserve President Mary Daly said on Thursday that the central bank's monetary policy is currently in a good place, with the labor market improving due to last year's rate cuts and inflation expected to continue declining as the impact of tariffs fades.

Why it matters

Daly's comments suggest the Fed is taking a more cautious approach to future policy changes as it assesses the evolving economic landscape, including the potential impacts of emerging technologies like AI on productivity and demand.

The details

Daly said the labor market is in a better place thanks to the Fed's rate cuts in 2025, and with inflation expected to resume its decline as the impact of tariffs rolls off, monetary policy is where it should be. She added that the Fed now has an opportunity to carefully evaluate incoming data and consider how factors like the rise of AI and changing productivity and demand will shape policy going forward.

  • Daly made these comments on Thursday, February 19, 2026.

The players

Mary Daly

The president of the Federal Reserve Bank of San Francisco.

Robert Kaplan

The former president of the Federal Reserve Bank of Dallas, who participated in the live-streamed conversation with Daly.

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What they’re saying

“Our price stability and full employment both seem to be in a good place; policy is in a good place. And we have the opportunity now to think through what information is coming in, what impact will AI have, how will productivity evolve, how will demand strength evolve and how should we manage policy going forward.”

— Mary Daly, President, Federal Reserve Bank of San Francisco (marketscreener.com)

The takeaway

Daly's comments suggest the Fed is taking a cautious, data-driven approach to future policy decisions as it seeks to navigate the evolving economic landscape, including the potential impacts of emerging technologies like AI on productivity and demand.