Let's Appreciate San Francisco Fed President Mary Daly and Richmond Fed President Tom Barkin on What's Actually Happening in the Economy
Jan 9, 2026
Mary C. Daly and Tom Barkin, both Federal Reserve Presidents, dive deep into the current economic climate, reflecting on lessons from the 70s and 90s. They explore today's persistent uncertainty in geopolitics and technology, while emphasizing the importance of managing inflation expectations. The discussion reveals a stark contrast between economic data and public sentiment, influenced by media narratives. Daly and Barkin also touch on the potential of AI in driving productivity, as well as the economy's resilience against recession fears.
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Two Historical Paths Guide Today's Policy
- Mary Daly frames the 1970s vs 1990s as two policy lessons for today: wrong action amid productivity slowdown vs waiting for a tech-driven productivity boom.
- The key today is whether AI becomes a true productivity engine, which will shape whether policy should be tight or patient.
Monitor Inflation Expectations Closely
- Watch inflation expectations closely because rising expectations can self-perpetuate higher inflation and force aggressive policy responses.
- Maintain policy credibility by communicating determination to return inflation to target to keep expectations anchored.
A New Era Of Persistent Uncertainty
- Tom Barkin argues the defining feature today is persistent, elevated uncertainty across geopolitics, regulation, and tech adoption.
- That uncertainty raises volatility and requires firms and households to be more flexible than during the prior 40 years.