San Francisco Fed President Mary Daly discusses the transformative potential of AI across various sectors, noting that while widespread productivity gains are not yet evident, enthusiasm and investment are high. She views inflation as the primary risk, driven by energy and food prices, and emphasizes a data-dependent approach to policy, avoiding forward guidance. She sees the labor market as stabilized but with cautious hiring. She downplays financial stability concerns from tech exuberance and discusses the Fed's modernization under new Chair Warsh.
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San Francisco Fed
9.4
Government Agency
Mary Daly 7.0
Government Agency
Mary Daly 7.0
6/4/2026 7:49:01 PM
dxy
No explicit mention of the dollar. The Fed's data-dependent stance and lack of clear forward guidance suggest no strong directional bias for the DXY in the near term.
metals
No explicit mention of metals. Given the focus on inflation driven by oil and food, and a data-dependent Fed, there is no clear directional signal for metals.
ndx
Daly is 'pretty bullish' on AI's possibilities and sees real investment and enthusiasm from companies outside of tech. This implies a positive outlook for the tech-heavy NDX over the medium term as AI transforms business processes.
rut
Daly highlights that small and medium businesses are investing in and using AI. This could boost productivity and growth for smaller companies, which are heavily represented in the RUT, suggesting a cautiously positive outlook.
wti
If you look at the futures market for oil, it's $80 a barrel by the end of the year.
| 5/8/2026 9:43:37 AM | medium term cautious down | 21 days later | -6.03% | +3.01% |
| 5/7/2026 9:32:54 PM | short term cautious down | 5 days later | +5.87% | -2.93% |
yields
Daly notes that oil and food prices are driving up inflation, and that initial AI CapEx creates competition for services, raising costs. This suggests upward pressure on yields in the near term.
