Mary Daly, president of the San Francisco Federal Reserve, offered a measured but optimistic read on the US economy during her appearance at the Bloomberg Tech conference on June 4. The labor market, she said, is “resilient” and has “stabilized,” even as inflation continues to shift in ways that demand close attention.

Her comments arrive at an interesting moment. The federal funds rate target sits at 3.50%-3.75%, a range the Federal Open Market Committee has held steady through recent meetings.

The inflation picture is getting more complicated

Daly noted that price pressures are increasingly driven by energy and food costs, partly linked to geopolitical tensions including the ongoing Iran conflict.

Daly acknowledged this tension without tipping her hand. She said the Fed is “prepared to respond either way” on interest rate adjustments, a deliberately vague statement designed to preserve maximum flexibility.

A labor market that’s holding its ground

Daly’s use of the word “stabilized” is deliberate and specific. It suggests the labor market isn’t overheating (which would fuel inflation) but also isn’t deteriorating (which would signal recession).

What this means for investors and crypto markets

Daly made no mention of cryptocurrency or digital assets during her remarks. The Fed’s focus remains squarely on traditional economic indicators: employment, inflation, geopolitical risk.

A rate-hold environment at 3.50%-3.75% creates a specific set of conditions. Borrowing costs remain elevated compared to the near-zero era that fueled the 2020-2021 crypto bull run, but they’re meaningfully lower than the peak tightening cycle.

Daly’s emphasis on uncertainty and readiness to move in either direction means markets should prepare for volatility around key data releases, as any significant deviation from expectations could shift the probability of the Fed’s next move.