Mary C. Daly will be the next president of the Federal Reserve Bank of San Francisco, the bank’s board of directors announced Friday. She will start in the new role on October 1.
Daly is a widely respected economist who joined the San Francisco Fed in 1996 as a researcher and climbed the ranks to become director of research. She has focused much of her attention lately on why wages aren’t rising faster despite low unemployment.
“In addition to her profound knowledge of economics and monetary policy, Mary is one of our nation’s leading authorities on labor market dynamics," said Alex Mehran, chair of the presidential search committee.
Daly is taking over the bank after former president John C. Williams departed this summer to become president of the New York Fed. She will be the second woman to lead the San Francisco Fed, the other being Janet L. Yellen, who was president of the San Francisco bank from 2004 to 2010 before becoming chair of the Federal Reserve Board. Daly credits Yellen with making “my career kind of explode.”
The Fed has been pushing to diversify its ranks. The search committee for the San Francisco post said it reached out to 283 candidates and that a third were female and a third were minority. Daly is openly gay and has spoken out frequently about the need for more diversity at the Fed and in the economics profession.
“Many thought of the Fed as a ‘boys' club.’ This perception was deterring talented individuals from applying and undermining our goal of attracting the highest caliber workforce,” Daly wrote in a Medium post two years ago.
Daly worked to change that perception and bring more female research associates to the San Francisco bank. She called university professors and then called every candidate — male and female — when the bank extended an offer in an effort to ensure they understood all the opportunities ahead of them.
The Federal Reserve Board is made up of seven governors who sit in Washington, and are appointed by the president and confirmed by the U.S. Senate, as well as 12 regional Fed presidents, such as Daly, who are appointed by boards from their areas.
When it comes time to decide on interest rates, all seven Fed governors plus the head of the New York Fed and four regional bank presidents who alternate annually make the final call. This year, the San Francisco Fed gets a vote on interest rates, and Daly will be in place to vote at the November and December meetings.
Fed Chair Jerome H. Powell has said the Fed will continue to hike interest rates gradually in the coming months. Wall Street is widely expecting the Fed to raise interest rates at its September meeting, but it is less clear what will happen in December. The Fed wants to ensure the economy doesn’t overheat, but inflation has remained tame so far.