Transcript: Mary Daly on “Face the Nation”, October 10, 2021

The following is a transcript of an interview with San Francisco Federal Reserve Chairman Mary Daly aired Sunday, October 10, 2021 on “Face the Nation.”

MARGARET BRENNAN: Now we’re going to look at the economy. Mary Daly is chairman of the Federal Reserve in San Francisco. Hello to you.

SAN FRANCISCO FEDERAL RESERVE BANK PRESIDENT MARY DALY: Good morning.

MARGARET BRENNAN: Is job growth stagnating?

DALY: It’s a volatile time we’re in right now, COVID isn’t behind us, so I don’t expect the job market to be just continuous. He’s going to have these ups and downs, especially with the Delta variant. So I think it’s too early to say it’s stagnating, but we’re definitely seeing the pain of COVID, and the pain of the Delta variant is having an impact on the job market.

MARGARET BRENNAN: But do you think you underestimated the impact of Delta?

DALY: Well, I’ve always expected Delta to wreak havoc, but not plunge us into another recession, and we’re seeing this toll. We see it disrupting families, disrupting education, disrupting people’s ability to get to work and feel safe. And you see it in the monthly data, but you also see it in any community that you walk around. Delta has taken its toll. But that hasn’t derailed us yet, and I – and I don’t have a different opinion than I had on it when we first started. It’s going to be tough and as COVID goes, so does the economy.

MARGARET BRENNAN: You know, women are causing this decline. If you look at the numbers, last month 26,000 jobs lost, more than men. Women are withdrawing from the market. The participation rate is dropping. Black women in particular are suffering. What is behind these losses? And when do we reach the point where the damage is long term?

DALY: Well, it’s far too early to say the damage is long term, but we have to recognize that women, especially women with children who are caring for elderly parents or anyone else, are under siege. . They’ve been there ever since COVID hit our shores and now they’re facing it. We thought the school could save him, didn’t we? People were going back to school; the children would go back to school and the women would be able to breathe deeply. But what we are seeing is that when a child contracts COVID because he is not yet vaccinated and cannot be vaccinated, the classrooms are quarantined. A friend of mine has a business herself, her husband has a business. She has a child who is in quarantine. Now she has a homeschool, a child. And send the other kid to school. It’s hard. And eventually it’s exhausting and the women pull back and say, I have to take care of my family. And when we get past COVID, we’ll get through that. So I know they’re all out there saying let’s get vaccinated and put this COVID thing completely behind us.

MARGARET BRENNAN: Since the start of the pandemic, American taxpayers have injected about $ 6 trillion to try to stabilize the economy through some of these congressional programs. Our CBS News poll, I want to show you two things here: 60% of respondents think the president is not doing enough to fight inflation and 46% think his new social spending plan would hurt inflation. In other words, it would drive up the prices they pay. Should Americans be Worried?

DALY: Well, Americans are feeling it in their wallets right now. Everyone is feeling the rising prices of energy, food, basic services, and it’s painful because they – they aren’t – we’re not used to seeing it. It is striking in certain categories. And of course, that’s a challenge, especially for low and moderate income families who used to be – they spend most of their money on food and energy. So, it is really difficult. And it’s also very directly linked to COVID. It has to do with supply bottlenecks, disruptions. That we cannot get people back to work completely in the global economy. In the United States, we cannot get people back to work completely. We have these really looking forward to going out and spending consumers hitting the wall of supply constraints and of course the prices will go up. But I don’t see this as a long-term phenomenon. And the problem comes back again, if we can get through COVID, we will return to the normal conditions that we are more used to and the ones we all want.

MARGARET BRENNAN: But you don’t see spending – emergency spending as inflationary?

DALY: Well, every time you spend, it’s going to add extra pressure to the demand that’s going on in the economy. So the key is if the spending we make as consumers is coupled with the expansion of supply, then everything will be fine. But if it’s – if we keep having supply bottlenecks and keep spending, then we’re going to have more inflation.

MARGARET BRENNAN: Yeah. Well, I – I was pointing there to the chairman and the criticism he might take based on our poll. But I want to ask you, since you’re in California, we mentioned all these offshore ships, container ships unable to come to the ports of Los Angeles, Long Beach. What will be the impact of these types of delays on vacation spending?

DALY: Well, right now we’re seeing consumers trying to get out early and spend their money on getting their products before they run out. What I’m really seeing is that people are going to have longer wait times. If you are trying to buy something for the holidays, people buy it now and are often told that they can only get it after the holidays are over. So there will be delays. There are going to be continuous bottlenecks. There is probably going to be some price pressure for holiday items, and we will have to continue to overcome that. The key, again, is just to increase the supply in the labor market, in the goods market so that we can overcome that.

MARGARET BRENNAN: Okay. Mary Daly, thank you for your analysis and for joining us today. We will be back immediately.