The Forum Club of the Palm Beaches recently hosted a fascinating interview with San Francisco Fed President Mary Daly, and I wanted to share some key takeaways with a particular spotlight on the labor market.
Table of Contents
Fed Priorities
The Fed is balancing easing inflation without derailing the job market post-COVID.
Daly emphasized supporting the labor market to fully recover from pandemic losses.
When asked what the next rate decision would be six weeks from now, she said to keep an open mind, which drew laughter from the audience.
Healthy Debate
On the news of a “divided Fed,” her answer was clear: No, it is not more divided than usual.
The high consensus during COVID was the anomaly.
She emphasized that healthy debate, like we last saw in 2019, is what drives public policy.
Data Sources
Fed data draws from three pillars: government stats, surveys, and chats with businesses about plans.
Amid “data fog,” they lean in more on real-world conversations.
Unemployment data shows some softness, but not outright weakness, which is reassuring.
AI Impact
AI has two sides.
It drives stock prices up.
But it starts fights between those who fear big job losses and those who love it.
When jobs are hard to fill, companies invest in tech to boost output.
Think of AI like electricity or the steam engine.
It could change everything.
For example, a physician’s assistant uses AI to ask questions.
This helps with doctor shortages.
It does not replace people fully.
But past tech changes, like computers, cut out mid-level jobs.
We must watch this.
K-Shaped Recovery
The top half with high income stays strong.
The bottom half hurts.
They used up savings from COVID.
Inflation eats at buying power.
Spending slows.
Layoffs hit the top group more.
More people carry high credit card debt.
They have no emergency fund.
Housing is a big worry.
This is why I find my work as a recruiter so meaningful. I wrote more about the role transitions play in people’s lives in 80 Candidates and Counting.
People feel less sure they can find a new job if they lose one.
Economic Reality
The economy is good overall.
But it is more at risk now.
Daly’s story shows this.
She dropped out of high school to help her family during a down economy.
She later took her GED and got a PhD in economics.
She emphasized that no matter what the data shows, the economy is about people.
Her Role
As the San Francisco Fed President, what does she do each day?
She runs a business with 1,800 workers.
She handles cash flow and digital payments.
She talks a lot with the community.
She learns what people face.
She shares this with the Federal Open Market Committee.
I relate to her emphasis on listening to people. Learn more about my approach to connecting with people in my bio.
Looking Forward
On picking the next Fed Chair?
It will not change their work.
They stay independent and use data.
Conclusion
While the economy remains strong overall, the K-shaped recovery creates uneven risks, and AI’s impact on jobs deserves close attention.
What do you think?
Will AI boost output without making inequality worse?
Or does the soft job market mean big changes are coming?
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