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Mary Daly, President and CEO of the Federal Reserve Bank of San Francisco.
David Paul Morris | Bloomberg | Getty Images
Mary Daly, President and CEO of the San Francisco Federal Reserve, said Mary Daly, investor uncertainty.
The global economy is slowing and the circumstances in which the UK finally left the European Union have also affected economic activity, Daly told CNBC's Street Signs.
"I do not want us to focus too much on trade when these other impending uncertainties must also be resolved," she said.
Nevertheless, Daly – who is not a voting member of the Federal Open Market Committee – recalled that the US economy was "in a good position" because it is close to full employment, with inflation slowly approaching that of inflation. Fed 2% target and the federal funds rate is almost "neutral".
This means the Fed can afford to wait before taking its next monetary policy move, she said. "I think patience is the way we should be right now," she added.
What really keeps me at night is the data and the environment that get out of sync and possibly the possibility that the atmosphere becomes the self-fulfilling prophecy of the data,
Mary Daly
President and Chief Executive Officer of the Federal Reserve Bank of San Francisco
& # 39; out of sync & # 39;
Daly said that for now, the main risk for the US economy is the uncertainty that affects the business climate. She warned Monday that the US economy – which is the largest in the world – could be in danger if the business climate and economic data end up "out of sync".
She cited two cases where sentiment and data have moved in opposite directions. In December last year, she said, the published economic data was "good" but the mood among investors and companies was "bad". And then the opposite happened in January, she added.
"What really keeps me going at night is data and the environment that is out of sync and possibly the possibility that the atmosphere becomes the self-fulfilling prophecy of the data," Daly told reporters on Monday. at the Symposium on Asian Banks. Finance in Singapore.
She warned that if "people are really uncertain, they fear a recession or a slowdown in activity and this is incorporated into their thinking and then they spend or invest less." Subsequently, "less spending and investment creates a slowdown than we would have had otherwise," she said.
Admittedly, Daly said he did not see this happening in the United States. However, some companies have begun to retain investments and riskier projects due to uncertainties.
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