The Federal Reserve of San Francisco on Friday named its head of research Mary Daly as its next president, succeeding John Williams, who departed in June to lead the New York Fed.
Daly takes the helm in San Francisco on October 1. Daly's appointment was approved by the Fed's Board of Governors in Washington. This is the same position former Federal Reserve Chair Janet Yellen held from 2004 to 2010.
"I am truly honored to have been given this opportunity," Daly said in a statement. " I believe very strongly in the Federal Reserve's mission and in the important role we play in helping to create strong, stable economic conditions in all corners of the country that allow individuals and businesses to prosper."
Daly has been serving as the San Francisco Fed's executive vice president and director of research since 2017. She studied economics for her bachelor's and master's degrees, and has a Ph.D. in economics from Syracuse University. As a Fed economist since 1996, she has focused much of her research on the labor market and wage growth.
"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, chairman of the San Francisco Fed's board of directors and chairman of the presidential search committee. "Her research in this area reflects her deep commitment to understanding the impacts of monetary and fiscal policy on communities and businesses at a local, regional and national level."
As San Francisco Fed President, Daly will receive a vote on U.S. interest rate policy in the December meeting of the policymaking Federal Open Market Committee. Then, the role will not receive a voting right again until 2021. Every year, the FOMC rotates voting rights among its 12 regional presidents.
Fed policymakers are expected to raise rates later this month and once more in December. Since December 2015, the FOMC has raised interest rates seven times, with their benchmark rate at a range 1.75 to 2 percent.
The appointment comes at a time when the Fed is meeting its dual mandate of full employment and price stability. The unemployment rate was 3.9 percent in August, near historical lows. And the Core PCE index, the Fed's preferred measure of inflation, hit the Fed's 2 percent target earlier this summer after undershooting it for the past six years.
Daly, in a San Francisco Fed publication in April, said there are few signs in the economy that indicate danger of "runaway inflation or that the gradual pace of policy normalization the FOMC projects will leave large swaths of potential workers without jobs."
Daly was selected from a pool of more than 280 candidates. The candidate pool was 33 percent female and 33 percent of minority background. The Fed has recently been under pressure to increase gender and racial diversity in Fed leadership.
The San Francisco Fed district includes nine states – Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah and Washington – in addition to American Samoa, Guam and the Commonwealth of the Northern Mariana Islands.
"The Twelfth District will benefit from her increased involvement with the diverse constituents in our District," Mehran said.