What’s being done to keep the American economy running smoothly? Who’s keeping watch over things like the employment rate and purchasing power? Does anyone care about the average citizen’s standard of living? In other words, who is the sheriff in town?
“What is still bothersome is we haven’t achieved price stability,” said Mary C. Daly, the President and CEO of the Federal Reserve Bank of San Francisco (FRB-SF). She defined price stability as simply: “it’s when people don’t have to worry about inflation.” She identified this as the core mission of the FRB, which “as we all know, has come from Congress.”
Daly was being interviewed by Michael McKee on July 17, 2025, in Victor, Idaho, at the Rocky Mountain Economic Summit to speak about the FRB’s work setting monetary policy.
“Inflation is like the largest tax people pay. It’s an unpredictable tax. You’re on a treadmill,” Daly said. “You earn well, you invest in your business, and inflation erodes your well-being.”
“We have inflation coming down,” she reported, and broke it down sector by sector such as housing, services, and goods. “I see these as the result of the policy that we have in place. But at some point, if you hold the economy too tight,” then it causes problems in the labor market such as unemployment or underemployment.
“So that’s why I see these two goals, the dual mandate, as so critical, because it gives you the kind of balance that ensures people have both things they need: opportunities in the labor market and price stability so that when they work and they invest, they can build careers and families and communities.” Daly explored this further in the interview.
In a nutshell, setting monetary policy is tricky. Read more about the details of trying to forecast the economic effects by clicking the link below. ♠️
Click here to watch the Rocky Mountain Economic Summit with Mary C. Daly 2025.