She Dropped Out of High School. Now She's President of the San Francisco Fed. – New York Times

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She Dropped Out of High School. Now She’s President of the San Francisco Fed.

Mary Daly, 55, is an economist specializing in labor markets who has worked at the San Francisco Fed for more than 20 years, including as head of research.CreditCreditDavid Paul Morris/Bloomberg

By Binyamin Appelbaum

  • Sept. 14, 2018

WASHINGTON — The Federal Reserve Bank of San Francisco has installed Mary C. Daly, a labor economist who currently serves as the head of research, as the institution’s new president beginning Oct. 1.

Ms. Daly, 55, will succeed John C. Williams, who became president of the Federal Reserve Bank of New York this year.

She is a widely respected expert on labor markets with an unusual breadth of personal experience. Ms. Daly dropped out of high school at the age of 15, working in a doughnut shop and at Target before a friend convinced her to earn a general education diploma. She worked her way through college at the University of Missouri-Kansas City, then earned a doctorate from Syracuse University before joining the Fed in 1996.

As president of the San Francisco Fed, she will immediately become a voting member of the Federal Open Market Committee, which decides monetary policy, including whether to raise or lower interest rates. She will vote in November and December as part of a regular rotation of Fed presidents. After that, she will not vote again until 2021.

Ms. Daly will also serve as chief executive of an institution with hundreds of employees, including economic researchers and bank regulators. The San Francisco Fed oversees a sprawling territory encompassing much of the Western United States, with branch offices in Los Angeles, Portland, Salt Lake City and Seattle.

Tim Duy, an economist at the University of Oregon, said that Ms. Daly’s expertise in the economics of labor markets was a good fit for the challenges confronting the Fed, which is struggling to figure out how much slack remains in the labor market and why wage growth remains so weak.

“She is an excellent pick for the position,” Mr. Duy said. “Her empirical focus is especially important for the kind of applied policymaking that is the Fed’s responsibility.”

Ms. Daly, who is openly gay, will become the third woman among the 12 presidents of the Fed’s regional banks. As a senior executive at the San Francisco Fed, she has been a leading voice for addressing what she has described as a “diversity crisis” in the economics profession and at the Federal Reserve. At the San Francisco Fed, she pushed successfully to balance the hiring of male and female research assistants.

In a statement issued by the San Francisco Fed, Ms. Daly described herself as “truly honored.”

“I believe very strongly in the Federal Reserve’s mission and in the important role we play in helping to create strong, stable economic conditions in all corners of the country that allow individuals and businesses to prosper,” she said.

Ms. Daly will not be directly involved in overseeing Wells Fargo, the largest bank in the San Francisco region. While the bank’s regulators are on the San Francisco Fed’s payroll, regulation of large banks is under the supervision of the Fed’s board of governors in Washington.

Ms. Daly joined the San Francisco Fed in 1996, and rose through the ranks of its research department.

Earlier this year, Ms. Daly said her career “just kind of exploded” thanks to the opportunities she received after Janet L. Yellen, the Fed’s former chairwoman, was named president of the San Francisco Fed in 2004. Ms. Yellen became the Fed’s vice chairwoman in 2010, and its chairwoman in 2014.

“Just by interacting with her, answering questions, thinking about issues the way she did, I learned to do macroeconomics and labor economics simultaneously,” Ms. Daly said.

Ms. Yellen, for her part, said she was delighted by Ms. Daly’s appointment.

“Mary is an outstanding economist whose research illuminates the operation of labor markets and the impacts of the Great Recession,” Ms. Yellen said.

The San Francisco Fed named Ms. Daly as head of research in December 2016. After Mr. Williams left for the New York Fed earlier this year, she was widely championed as a top candidate to succeed him.

“Mary is one of our nation’s leading authorities on labor market dynamics,” said Alexander R. Mehran, a developer in California who led the San Francisco Fed’s search committee. “Her research in this area reflects her deep commitment to understanding the impacts of monetary and fiscal policy on communities and businesses at a local, regional and national level.”

Follow Binyamin Appelbaum on Twitter @bcappelbaum.

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