Mary Daly, president of the Federal Reserve Bank of San Francisco, reiterated that restoring price stability is essential—but not at the expense of the broader economy. In remarks summarized by Chaincatcher, Daly stressed that the Fed can’t pursue lower inflation by “harming the economy,” framing policy as a careful balancing act between returning inflation to the 2% target and protecting the labor market.
That cautious tone is consistent with Daly’s recent messaging. She’s described policy as “in a good place,” argued the Fed can “afford patience,” and urged a “measured, data‑dependent approach.” Daly has warned that while progress on inflation matters, “progress is not victory,” and uncertainty around both price pressures and employment means policymakers should plan for multiple scenarios rather than a single forecast path.
Daly has repeatedly highlighted the Fed’s dual mandate: to restore price stability while supporting maximum employment. She’s cautioned against keeping rates “too high for too long,” saying that if restrictive policy triggers mass layoffs, “you’ve given people low inflation, but you’ve taken their jobs,” which would defeat the dual mandate’s purpose.
Markets have read Daly’s comments as signaling that the Federal Open Market Committee is likelier to keep the policy rate in the current 5.25%–5.50% range for an extended period, delaying cuts until there is clearer evidence that inflation is steadily moving toward 2%.
Her stance dovetails with recent private-sector projections. Goldman Sachs, for example, has pushed back its forecast for the first Fed rate cut to September 2026 and now expects inflation to run near 2.9%—a view that implies a more restrictive policy environment for longer and tougher conditions for risk assets.
Daly didn’t give specific forecasts for growth, unemployment, or the timing of rate changes in the Jin10 summary, but her overall message was clear: the Fed will favor incremental, data-driven decisions over pre-committing to a rapid easing cycle.
What this means for crypto: prolonged higher rates typically reduce liquidity and risk appetite, putting pressure on risk assets including crypto. Daly’s insistence on balancing price stability with employment protection signals the Fed is walking a narrow path—one that could keep monetary conditions relatively tight and markets volatile until inflation and labor data present a clearer picture.
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