Mary Daly, the President of the Federal Reserve Bank of San Francisco, recently addressed concerns regarding inflation pressures stemming from widespread tariffs. Her comments have come to line up quite nicely with the Fed’s controversial policy of late. This is the typical, modestly restrictive approach that allows economic growth while keeping inflation in check.
In her recent remarks, Daly emphasized all the ways things are different in today’s current economic environment. She noted that difficult-to-challenge, bedrock facts demonstrate rapid growth and a historically stable labor market. She warned that inflation could be reinflated due to unknowns from tariffs.
The hard data are not a misread of solid growth and the labor market. I’m a little concerned inflation may pick back up from tariffs,” Daly stated. The uncertainty we have going into this can be addressed. That’s why it’s crucial to remain calm, and assess the overall impact of the administration’s list of proposed changes. We don’t have complete clarity on tariffs. We don’t have the luxury to go-foot-dragging cautious on policy. With inflation cooling, the expectations for Fed policy are in a very good place, modestly restrictive.
Daly’s remarks underscore the challenge policymakers will have trying to steer a course through such variable and transformative economic waters. While the Federal Reserve is rightly focused on bringing down inflation and restoring stability, it addresses inflation risks that can arise from Trumpian externalities, such as tariffs on a booming economy’s supply chain.
In other brave monetary news, cryptocurrency lawyer James Murphy, whom you may know as “MetalLawMan” on X, has gone full vigilante. Specifically, he has sued the Department of Homeland Security (DHS). Murphy has since brought this suit in a D.C. District Court, placing the DHS in the position of defendant. Importantly, the details of the lawsuit itself are largely under wraps. It adds further complexity to the already complicated regulatory landscape governing cryptocurrencies.
Daly and Murphy work in remarkable ways to address urgent challenges in their respective disciplines. Their collective work sheds light on the often hidden economic and legal forces that are now forging the financial and regulatory landscape in which we live.