FX.co ★ San Francisco Fed’s Mary Daly urges markets to ignore volatility amid Iran conflict

On April 8, Mary Daly, president of the Federal Reserve Bank of San Francisco, said that the fundamental resilience of the US economy remains intact and urged market participants to ignore short‑term volatility stemming from the conflict with Iran.

Speaking to the St. George, Utah, Chamber of Commerce, Daly said consumer activity and corporate investment remain at stable levels and that the financial system continues to function without critical disruptions despite heightened geopolitical risk.

She acknowledged the risk that inflationary pressure could intensify as a result of the current tensions. She also added that controlling price growth remains the Fed’s priority. The Federal Reserve is not seeing signs of a deterioration in the labor market, which she described as resilient and balanced.

Daly said it was premature to draw definitive conclusions about how long the period of unusually high oil prices might last and urged a measured approach to monetary policy. The Fed plans to look through short-term market moves and news cycles in order to preserve predictability over the longer term.

The central bank does not intend to react to every change in market conditions or every news item, Daly said, warning that excessive responses to uncertainty could undermine economic planning. Officials will continue to scrutinize incoming macroeconomic data closely to determine the future path of the policy rate.

She added that the real economy’s resilience to external shocks supports maintaining the current course without emergency adjustments. With no one in financial markets benefiting from heightened volatility, Daly said the Fed will focus on sustaining stability and that future decisions will be driven by developments in domestic demand and corporate investment.