Fed’s Daly Says Similarities to 1990s Don’t Mean Same Economic Outcome

Mary Daly, president of the Federal Reserve Bank of San Francisco, said the US economy may share some similarities with the 1990s, but that does not mean it will produce the same outcome. Markets are closely watching the Federal Reserve’s path for interest rates.

Walter Bloomberg reported on June 4 that Daly said parallels between the current economy and the 1990s should not be taken to mean the US will follow the same trajectory.

She said direct comparisons are limited because the economic backdrop, productivity, labor market and technological innovation differ from that period.

Some market participants have recently argued that the US economy resembles the late-1990s, technology-led expansion, citing increased investment in artificial intelligence and expectations for productivity gains.

Daly emphasized that economic forecasts and monetary-policy decisions should be based on current indicators and data rather than relying too heavily on past episodes.

Fed officials have repeatedly pointed to uncertainty around inflation and the economy, reinforcing the view in markets that future rate decisions will continue to be guided by incoming data.