Fed’s Daly says US economy in good place despite Iran war uncertainty

San Francisco Federal Reserve President Mary Daly assessed the U.S. economy as fundamentally strong on April 8, 2026, while addressing the St. George Area Chamber of Commerce in Utah, despite persistent uncertainty and volatility arising from the ongoing Iran war. Daly highlighted that consumer spending and business investment remain resilient, serving as key pillars of stability amid geopolitical tensions that have rattled global markets. Her remarks come as a U.S.-Iran ceasefire agreement, announced prior to her speech, has failed to fully alleviate concerns among analysts about broader economic risks, including inflationary pressures and labor market fluctuations. In her detailed comments, Daly acknowledged that the Iran conflict could potentially fuel inflation and disrupt labor market stability, but she emphasized that current data does not indicate any deterioration. "There’s a concern that maybe this will push inflation up: that’s our job, we’ll focus on that. And there’s a concern that maybe the labor market isn’t as solid, but we’re not seeing that, we’re seeing it kind of settle at a good place," she stated, underscoring the Federal Reserve's commitment to monitoring these indicators closely. Daly also noted that while oil prices have been volatile—tumbling recently as former President Trump touted the ceasefire and vowed to help with Strait of Hormuz traffic—it is still too early to determine the duration of elevated energy costs, which could feed into broader price dynamics. The broader economic context includes mixed signals from Wall Street, where analysts remain wary despite the ceasefire; for instance, Goldman Sachs has flagged selective opportunities in chip stocks ahead of Q1 earnings, reflecting sector-specific resilience amid uncertainty. Daly’s assessment aligns with a cautious optimism that the U.S. economy can weather external shocks, supported by robust domestic demand. However, she warned that the Fed must avoid overreacting to short-term news cycles or market swings, advocating for a steady, data-driven policy approach to ensure long-term stability. Concluding her address, Daly stressed the importance of the Federal Reserve maintaining composure amid noise, stating, "Important that Fed doesn’t move around as much as news, or markets, do," and acknowledging that uncertainty and volatility are inherently unsettling. Her perspective reinforces a prevailing view among Fed officials that while geopolitical events like the Iran war pose risks, the underlying U.S. economic fundamentals—such as steady employment and consumption—provide a buffer. This stance suggests a measured monetary policy outlook, with the Fed likely to prioritize evidence of sustained inflation or employment shifts before adjusting interest rates, even as global events continue to evolve.