A Conversation with Mary C. Daly at the San Francisco Fed’s 2025 Western Bankers Forum

Mark Packard:

We are ecstatic to have her here with us today, and I’m going to read her formal introduction. Mary C. Daly is the president and chief executive officer of the Federal Reserve Bank in San Francisco. In that capacity, she serves the 12th Federal Reserve District in setting monetary policy. Prior to that, she was the executive vice president and director of research at the San Francisco Fed, which she joined in 1996. President Daly holds a PhD in economics from Syracuse University, an MS degree from the University of Illinois at Urbana-Champaign, and a BA from the University of Missouri, Kansas City. President Daly’s research focuses on employment and wage trends, economic growth, and economic shocks. Her research has advanced understanding of the Federal Reserve’s maximum employment and inflation mandate. So please join me in welcoming Mary Daly to the stage. So to start off today, last week the FOMC decided to cut rates 25 basis points. How do you view that decision, and can you take us through your process with that decision?

Mary C. Daly:

Absolutely. And I just want to second the welcomes you’ve received—it’s so great to have you here. It’s great to have you in the location with us. Thank you for coming. If you’re virtual, thank you for watching. Hopefully you’ll get a lot out of this program, especially in Mongkha’s part.

Here’s how I see the decision that we made. If you step back and you go back to December of last year, the end of last year, and you look at the summary of economic projections, which is what the FOMC puts out four times a year that says here’s our projections for how we expect the economy might go. The median of that projection for the interest rate was that we need two interest rate cuts over the course of 2025. Now that’s not a promise, it’s a projection, and so you have to wait for the economy to evolve.

And then earlier this year, in April, the administration started to put out more details about its policy agenda. And that included the agenda for tariffs, immigration, deregulation, and tax cuts. So you have to wait for those to settle out to see the net effects of those impacts before you meet to make decisions. Yesterday I gave a speech at the University of Utah. I said the way that I approach things in life, but also in policy, is to remain steady through change. You have to anchor to your goals, then assess the situation you find yourself in, and be patient enough to make a good assessment, and then ultimately decide. And so we decided at the last meeting to cut the interest rate by 25 basis points. That really reflects the fact that we’ve now had time to see how the policies, at least initially, start to take hold.

And one of the things that’s become clearer is that the inflation impact of the tariffs hasn’t been as large as many of the forecasted models would suggest it could be, and the impact on growth and the labor market… there’s more softness than many forecast and we expected it to be. So the balance of risks to our mandated goals have shifted. Not a lot, but a little. So we needed to take a little off the interest rate to rebalance those risks and make sure that we’re using our tools, the interest rate, effectively to manage both responsibilities.

And so interest rates remain modestly restrictive. That will continue to bring inflation down, but not so restrictive that they unnecessarily bridle and ultimately could injure the labor market. So we’ll have to continue to make that assessment in the coming meetings, not just the meetings that come before the end of the year, but the next several meetings, to see what else will be needed, if anything, to go forward. I think a little bit more will be needed over time to get that interest rate where it’s balancing out those two risks. But when that is going to happen is really going to be a reflection of the incoming information, both on inflation and on the labor market.

Mark Packard:

Thank you. So how do you currently assess the risks of the Fed’s mandates of full employment and price stability, and how do you balance those two to be able to have an appropriate stance in monetary policy?

Mary C. Daly:

Well, we’re in the hard part of central banking right now because there is no risk-free path. You essentially raise the interest rate and you can combat inflation more quickly. But you could injure the labor market because you’re tightening the economy and that causes weakness in growth, weakness in the labor market potentially. If we lower the interest rate, if you do it and you say we’re going to give full support to the labor market, that could spur back inflation or have it remain high above target for a more persistent period of time. So our goals are in conflict in terms of how the interest rate can be used, and if we have an interest rate in a period of time where the interest rate moves, and however you move it up and it solves both of your problems, that’s called the divine coincidence. We are definitely not in the divinity section right now. We’re in the trade-off section. So, the divine has left us, now we’re in trade-off space, but that’s what our job really is, is to balance those risks.

And we have a framework for balancing the risks. We released our new framework just in August, and in that framework, what we said is when our goals are in conflict, we balance the risks. So the risks that inflation will stay above target and rise, the risk that the labor market will falter, maybe stumble. We look at all of that together, and that’s why you saw us take a step towards lowering the interest rate, but not go all the way to neutral. So we still have pressure on inflation, and we gave a little bit of relief to support the labor market. And that’s that exact thing. So if you adjust the path all at once, you risk one of the goals when you’re here. If you adjust the path gradually, assess the information before deciding, then you can actually get to a good achievement. That’s what we’re aiming for.

Mark Packard:

So, as you stated before, the economic projections were also released last week also. What’s your view of the economy going into the last quarter of this year and into 2026?

Mary C. Daly:

If we go back to the projections, I think we can start with the projections, and I can talk more about my own outlook. But the projections are a fairly reasonable benchmark for how things might evolve. But again, when you think about projections in your own business, you don’t think of those as promises and act on them without checking. So you make a projection, maybe it’s a year projection, and then every quarter you’re seeing if you’re getting close to that projection or you’re going a different way. The FOMC works very much the same. We all make projections, but we check those projections against incoming facts, and then we use the incoming facts to think about new projections and always updating essentially. But the projections right now show that the median of the FOMC expects inflation to remain a little bit in the 3% range over the course of this year, which—if you think about taking tariff-related increases out—which are largely confined to the goods sector, if you think about taking that out, then ystagflationary episode or anything that looks like we’re on the precipice of decline.

I think underlying, the economy is in okay shape. There’s cautious optimism. Utah is a place where there’s cautious and even more optimistic views. I mean, you see there’re cranes everywhere here. That is a sense that businesses feel there is a future despite the fact that this might be a little slower than it was last year. And despite the fact that there’s some risks on the horizon, there’s still this forward movement.

You see that in a broad part of the economy anywhere in the west, I see this basically anyway, and when you cross the Rockies you see this type of thing, but in other parts of the nation as well. So my outlook is pretty… it’s reasonably good, but I don’t think we have the… It’s not something you can just say, well, we’re good, so we don’t have to watch. It’s really a place where you have to monitor. And I’m sure that’s true in business. It’s definitely true for the FOMC. So my own view is let’s monitor, let’s continue to watch inflation, make sure the statement I just made, that inflation is contained and expected to go down once the tariff effects move through. And then let’s continue to monitor the labor market and make sure that the softness we’re seeing doesn’t turn into weakness. Because once it turns into weakness, it’s very challenging to bring it back.

Mark Packard:

Do you see any red flags out there or any cause to be optimistic?

Mary C. Daly:

I see lots of causes for optimism and then I’ll talk about any risks that I see. So what’s the case for optimism? The case for optimism is the businesses are cautiously optimistic. People aren’t going home, folding up their tent and saying, I’ll wait until this is over. How do I know? Because they’re still hiring for principal positions. People don’t hire loads of people when they’re trying to tighten their belts, make sure they’re prepared for whatever happens. But they do hire for critical positions. We see that. The second thing we see, and this is maybe even more telling, is that business investment has been the bright spot in the recent statistics. Consumer spending’s been slowing, business investment’s been rising. So a lot of that investment is driven by IT investment, software, programming. That is probably, we don’t have the ability to trace it directly, but if you look at other evidence, it looks like that’s AI driven.

That companies are purchasing software that’s AI-enabled, they’re working with AI to do some back-office operations, maybe even bringing it into some core responsibilities—depends on what business you’re in. But ultimately that’s an enthusiasm that is about the future, along with the ability to be managing costs as you move forward. So, I see that as a positive.

So red flags, I wouldn’t say we have a lot of red flags. What I would say is we have things on… I have like a dashboard in my mind and on the dashboard are all the things we have to watch. And then you look for them, when are they getting yellow, and when do they turn to sort of orange? And then so I don’t see red all around, but what I see is there’re some yellow things that could be turning into orange.

And the labor market’s one of them. Because historically when we see the labor market soften, it can get some momentum in that softening. And some places where you have leading indicators are when young people aren’t being hired. So right now you’re seeing new college graduates, new graduates from high school, they’re just not getting hired at the same rates. The 16- to 24-year-olds are having a harder time than sort of mid-career people. So that’s something we should keep our eye on. We also see that people’s job search is extending in time. It takes longer to find a job. Nothing that says this is an emergency, like a red flag, but certainly something I’m watching. And I’m also watching the fact that job-finding rates just in general are not as high as they were. So someone goes out to find a job and they’re just not finding it as quickly, but they’re also not finding it as well. And so those are the leading indicators I would watch. Again, nothing in the red flag range, but definitely in the yellow flag ra

Mark Packard:

You mentioned investment in AI, and I’m curious of your thoughts of what you think the impact of AI will be, and maybe as we’re talking to a group of bankers, maybe in the banking sector, what you think the impact of AI will be over the next while?

Mary C. Daly:

So I’m going to start with things that I see that are positive and then end with things that I see on the horizon that I know bankers, when we talk to you all, have been bringing to our attention as potential concerns. So let me start with the positives.

So last January, the San Francisco Fed opened or launched an EmergingTech Economic Research Network. And it was really a consortium to bring in academics to talk about what’s possible, technologists to talk about what’s possible. But then CEOs, we do so many roundtables and outreach to just bring CEOs from different industries, to tell us what are you doing with AI? Are you aware of it, et cetera? So we started last year, January 2024. And when we first brought financial institutions in—small, medium, large—what we heard is: We’re experimenting. Our employees know what it is, and we’re trying to get ahead of it.

We’re making some policies so people don’t misuse it, and we’re interrogating it for back-office operations, making sure that we have the ability to know what it is, if we ever want to automate payroll or our call centers, et cetera. But we’re not getting close yet.

So then as you update, as we go farther, everybody is now saying, oh yeah, we are definitely interrogating it for… It’s getting built into some of the call center software we might use when we purchase a call center software. We’re building it into, we’re thinking about chatbots so that our customers can get a service they want 24/7, 365, even if we’re not available for service. So we’re using that, but we’re still not using it for these other things. But the speed at which adoption has begun just tells me that companies, including financial institutions, are getting more familiar with it and getting more familiar with, it’s not going to replace humans, it’s going to augment humans.

So, it may one day replace humans, but we’re not in a conversation there yet. Most banks don’t have a hundred coders behind the scenes coding things. You’re doing basic things where you also want a human to interact with the information. So your customer-facing services don’t have any hallucinations. So I think there’re prudent ways to take on that, and I’m seeing it already happening, and I see even more discussions right now.

And you go to a community banking conference, in particular, I’m hearing people have discussions about: how are you using it? where can we get it? So it’s new, but the rate of change of interest turning to a little easy adoption, turning into, wow, this could be helpful for me, and it’s coming in some of the services I purchase anyway, like payroll services, et cetera. You can turn on the little switch, and it’ll do more things for you. So, I think that’s positive, and it has the potential to be really positive, because it can make the more regular work, the things that are easily automated, just easier to automate, which frees up people resources to do the more technical complex work, and also do more of the customer-facing work.

So, then the risk… where are the risks? Well, one of the big risks that I, at the top of my mind, is that one of the things that AI has been able to do is generate all kinds of new fraud schemes more quickly. So that if you think about things that are on, I know on bankers’ minds, on everybody’s minds these days is fraud, and how do your customers get duped, tricked into thinking that you’re calling when you’re not calling? And they’re clicking on links and all this. So I think the AI piece just makes it easier for fraudsters to have more technology to bring to bear.

And so then the burden is on all of society, essentially, to catch up, to try to put technological solutions to that, but also to train people to be the first line of defense. Because your technology’s almost, you want it to be the second line of defense, but I mean the first line of defense, but often things get through, and then they land in the employee’s lap or the customer’s lap, and then the customer clicking is the thing that unravels it or the employee is clicking.

So I think this is more of a societal push to meet that risk. And the more Ais-savvy people are, including your employees, the better able you are to kind of identify an AI-generated trick. Because if you know what it can do, then you know what to be aware of and wary of. So I think that’s just something we’re all going to have to take on. It’s a societal issue. It can’t be left to banks or to other businesses or to the federal government or state governments. It’s sort of a customer campaign, a people campaign, because people are getting duped all the time. I spend half my time answering questions to my friends about, do you think this is a scam? I said, if you’re asking me that question, don’t click on the link. They’ll call back if it’s your bank. Or you call them, that’s a better idea.

Mark Packard:

Fraud and dealing with fraud, we’re continually looking for solutions to be able to help because… And it’s not only just… it’s a lot of the older generation that gets caught and gets scammed.

Mary C. Daly:

I know in mail fraud, it’s not just AI fraud, frankly, it’s good old-fashioned mail fraud. Or people getting in your mailbox, or something like that. And then the next thing you know… So there’s a whole mix of things, and different parts of the distribution of age get tricked by different things. So again, it’s just a customer has to be really on top of this.

Mark Packard:

For sure. So, innovation with AI and the stablecoin and tokenized deposits that are coming our way… Just curious of your perception and perspective on those innovations, and how we can protect the consumer as well as protect and keep stable the banking system?

Mary C. Daly:

Sure. So this is partly my training as an economist. My reading of history is that you can’t stop technology. Technology is, it’s innovative, people use it. So AI is here, generative AI is here, agentic AI is here. These things are coming. And, so the same with stablecoins in the technology. And usually these technologies evolve and are developed because they do things for us that people want done. People would like to have easier ways to do things that AI can do, and there’re so many benefits to it. On the other side, on stablecoins, people would like to have tokenized collateral, tokenized deposits, cross-border transactions that don’t cost a lot and take a long time. So this can help. So my best thoughts on this are: who’s successful? It’s the people who say, how can we get to yes? So if you start with how can we get to yes on the technologies, then the next natural step you said is: what do I need to see to make yes comfortable?

And so, say in tokenized collateral, tokenized deposits, cross-border transactions, what do I need to see in the privacy, the consumer protection? What do I need to see to make sure we’re really doing it from financial stability? For me, it’s about thinking about what do we have to make sure of? And the most important thing, as a foundation, is you have to be knowledgeable about what the thing is and what is the use case it’s solving? And so with stablecoin, what I like to do is unpack it and say, okay, there’re so many things that are meant by that one comment or that stablecoins are trying to accomplish. So what are the things that you think are the most important use cases that a stablecoin might accomplish? Tokenized collateral, tokenized deposits, those are some…cross-border transactions. There’s lots of ways you can think of that occurring.

That doesn’t mean that each of you, as banks, have to issue a stablecoin. But that’s the kind of conversation I think is important to have. So I wouldn’t say that we should… I’m a person who thinks let’s try to get to yes by figuring out what are the things we need to do to feel comfortable, and instead of let’s try to figure out how we can say no.

And then on the side of why are these technologies positive and not injurious to banking? I think that I really focus a lot on community banks in addition to large and regional banks. So I know there’re people from everywhere here, but if you think about community banks, it’s a place where we have CDIAC and if you’re in a community bank, you know what CDIAC is. So the common complaint I hear is that our competitive ability just gets moved down the food chain. But innovation is often what you say, this could help us.

So embracing it in the smart ways and figuring how to work on it, I think is something that is beneficial to community banks potentially. And I know you have Vice Chair Bowman here, who’s thinking about both balancing the innovation and—not here in Salt Lake, by the way, but in the role—balancing innovation with all the protections. Because both are important, but that’s always true in everything we do. In you as banks and me as the Fed, we’re always trying to balance how do we innovate and make sure we’re not stale and that we’re taking advantage, offering better services, and we are balancing the needs of financial stability, consumer protection, privacy, et cetera? So I really think that’s my motto. Get to yes

Mark Packard:

And just to add a little to that, I think adapting in the community banking area, and being able to adapt to those things, because I think our model of being a community bank, it’s essential to adapt and move forward with those new technologies because things are always changing.

Mary C. Daly:

Things are always changing. But this is one of the reasons I liked… I was at the University of Utah, and you can go anywhere in Utah, anywhere in the country really, but at University of Utah, they have all these historical pictures from the beginnings of Salt Lake City and the Eccles family and things of that sort. It was really nice to see the older pictures because it reminds you that we’re not the first people to encounter technological change. We’re not the first people to have to weather what that means for businesses. And I’m also reminded they had a picture of a community bank up during the Great Depression and it said: we’re open late so you can get your money. And it was because people were very worried about not being able to get their resources. So that was their campaign. And it just reminds me that community banks are very durable over time, in part because you adapt. The business model is serve your community, but that doesn’t stay stagnant with pencil and paper and green eyeshades. You have

Mark Packard:

Absolutely. So let’s maybe shift gears a little bit. You talked about cranes in the air and I listened to your comments yesterday about when you go to a different area, you always look and see if there’s cranes in the air.

Mary C. Daly:

I do.

Mark Packard:

Maybe you could tell us your first-

Mary C. Daly:

Not the birds.

Mark Packard:

Yeah, not the birds. Maybe you could tell us a little bit about your outlook on the commercial real estate side as you look at the cranes?

Mary C. Daly:

Commercial real estate is a fascinating business, by the way. If you’re lending in the commercial real estate business, you very must have a strong constitution. But just a really interesting business. So in the pandemic and after, there’s all this concern about commercial real estate, but then, like you do today, you have to unpack it. What are the types of commercial real estate? So are you talking about multifamily? Are you talking about warehouse space? Are you talking about class A, class B, class C, office space, industrial? What are you saying? And there were parts of it that were strong and parts of it that weren’t. So the poster child for not strong was class B office space in major downtown hubs. Not Salt Lake, not Boise, Idaho, not anywhere in the Intermountain West, but San Francisco, Seattle, Portland, Los Angeles, Boston, you name those places.

And even there now it looks like we have hit the floor, and we’re on the upswing. And part of that is because what kills commercial real estate—and I’m probably preaching to the choir here—but what’s really bad are sudden, real estate of any type, are sudden stops with large depreciations that have to be absorbed all at once. Those are what, in Fed terms, we call disorderly repricings. You don’t want disorderly repricing. If you have to have repricing, you’d like a gradual repricing where people can take and absorb it over time. And we’ve seen that. And then the big office complexes, there were no real footprints or tentacles of banks because banks don’t do a lot of lending. Those are investment consortiums and things. They’re split up among a lot of different people. And if banks have an interest, they’re usually the primary interest. And so there’s a lot of that that’s going on.

So I think that world looks a lot better. There’s still more repricing to do, but nothing in so far that would suggest that’s calamitous. In other places, I’m seeing that banks who were engaging in workarounds to try to help businesses that were directly affected—office complexes in smaller places or class C—the workarounds allowed them to get enough going that now, as the economy is continuing and hit the sustainable pace, can come out of that, pull some of those workarounds off or they’ve already done those. And so again, it’s gradual repricing. So I’m not looking in my forecast for a huge upswing in commercial real estate because I think that people are going to be very cautious. You don’t fully know what the return to office is going to be, don’t fully know what the demand for those spaces is going to be. But we have so many new types of businesses forming in AI, whether they’re AI native large language model producers, or whether their company’s starting to do that. That’s what’s driving a lot of the do

But I also see some of that in Silicon Slopes and other places. And then there’s just this other part of business that’s getting done that I think is important. So I wouldn’t say bullish on commercial real estate as a driver, but you’re not as bearish as you might’ve been. And I’m certainly, it’s worked itself down the worry list. I never take my mind off commercial real estate. I think that would be imprudent, but I think it’s in better shape than it was. There’s one place where there’s a lot of concern that I hear about, but I haven’t seen, is in multifamily, because there’s a lot of building in multifamily. But then there’s a question about how many people want multifamily, and I think that’s still to be worked out. But ultimately we have such a dearth of supply relative to demand for housing. You’ve got to believe it doesn’t have a long way to fall.

Mark Packard:

Right. So let’s maybe move to the residential side of real estate and maybe give us your perspective? Mortgage rates are relatively high, not as high as when I bought my first home. When I bought our first home or when we bought our first home, interest rates were 12% mortgages, and we were ecstatic because it had come down from 15.

Mary C. Daly:

I know. Exactly. The world’s changed.

Mark Packard:

But relatively speaking, rates are high, and the supply of housing is low.

Mary C. Daly:

It’s low.

Mark Packard:

Yeah. Maybe you could just give us your thoughts on the residential side?

Mary C. Daly:

Yeah, residential, it is such an interesting world right now. And it’s not just here in Utah, it’s everywhere in the country. I referenced this study yesterday at my talk, that I’ll repeat here because I found it really interesting. The Cato Institute in DC did a study last year where they just surveyed across the nation and asked: what are your most important concerns? And across the country: affordable housing. And they don’t mean mixed-use housing or affordability, it usually gets housing affordability credits. They mean housing for many people, workplace, workforce, housing, et cetera. So across the board. So then they broke it out by geography, gender, age, education, income, wealth, and political party. And it was the same. All the statistics were the same no matter how you slice the data.

And their takeaway was that, if you’re a first-time homebuyer anywhere in the country, you’re having trouble. If you’re now a grandparent and you want your grandkids to live closer, but your kids can’t get close enough to you to make that an easy drive, you’re upset. There’s so many people who just don’t have the ability to either level up as their family grows, or level down as their family shrinks in the house, and they want to be elsewhere. And that’s just because there’s such a dearth of housing relative to the need for housing. So then you go back to what’s the root cause of that? So there’s a great picture you can draw about the supply of housing relative to the demand for housing. And what you see is, after the GFC, the global financial crisis, housing supply went up like a snail… sometimes didn’t go up at all.

And then housing demand kept going up because population grows, family formation expands, and that just grew and grew and grew and grew. And then in the pandemic, there was a lot of people who wanted bigger homes. So builders turned their attention to bigger homes. Those do not serve first time home buyers very well. So then you add on to that, the mortgage interest rate, which put people in mortgage lock, and then the supply comes on. So those are just all the perfect storm things. So my conclusion is: the interest rate coming down to something more like neutral, but neutral is around 3%, is not going to solve that large difference between housing supply and housing demand that you see.

And so really it’s going to be about builders, public private partnerships, a collective recognition that more housing supply that’s less expensive, not as large, less expensive, is going to be really important. But I’m seeing some great models start to pop up as examples. And one of them is here in Salt Lake with Clark Ivory’s company, and public civic leaders and nonprofits just starting to think about what do we need to do if we want to think about how housing can go forward? I mentioned Clark Ivory because we know him well. He was on the Salt Lake City branch board, so I’ve kept in touch with him. But that’s happening in Salt Lake. It’s happening in Boise, Idaho. Just seeing these public private partnerships where people want to have workforce housing and housing for all people throughout the age distribution, and that’s going to be the remedy, I think.

Mark Packard:

It’ll be a process.

Mary C. Daly:

It’ll be a process. It’s not going to happen overnight. But one of the things that you can see yesterday, and I took a little bit of, okay, things may be getting better, is home sales went up really rapidly, 21%, I think. And so that’s already suggesting that people have a willingness to buy even at this interest rate, and they have the confidence in the economy enough to make the purchase. Because if you’re underconfident about your job prospects, you do not buy a home. So that tells you a little bit about…we are looking for reasons to be optimistic. I think that, if it continues to hold, is a reason to say, okay, people feel the economy settling out. Another reason for optimism, I should go back to that, is recession risk calculated by most of these statistics and sentiment surveys has really come down a lot. So people don’t see a recession around the corner either.

Mark Packard:

Yesterday I had the opportunity to be able to go to the convocation and was impressed by your inspiring story of where you started and where you are now. I wonder if you could tell this group of bankers maybe a little bit about that story, and maybe the importance of mentors? And maybe how we as bankers could be a little more that way with our customers, the people we know in our communities, and even with our businesses that we work with?

Mary C. Daly:

Sure. Okay. Thanks for the question. So my story is, I mean, if you don’t know about me, then I can tell you a little bit about… So I dropped out of high school when I was 15 to work to support my family. Both my parents had fallen on hard times, and so I needed to work. And so I left school, and I started working, and ultimately I was working three or four different jobs. And I used to drive a delivery truck when I turned 16. And for doughnuts, I used to deliver doughnuts. And there was a giant billboard, which I would see on my route that said, become a bus driver. Good pay, good people. I think it said good benefits, too. And so I wanted to be a bus driver. And then I just happened to be lucky enough to… I kept in touch with my previous high school guidance counselor before I had dropped out.

She’d check in with me every once in a while. And she said, would you be willing to meet a friend of mine? And her friend was Betsy So Betsy and I would have coffee together in her car, because we met at the McDonald’s. I just got in her car. She gave me a coffee. We talked. So here’s what we talked about. You can’t be a bus driver unless you have a GED. And after I got over being crushed, because that was going to be my aspiration, she said, but let’s figure out how to get you a GED, sign up and everything.

So I got a GED, and then I got the scores back and she opened them with me, and she said, you should try a semester of college. And I didn’t really know what college was because I didn’t have an awareness that anyone in my world had gone to college, none of my parents had or anything. So she said, okay, but you can do it. So she paid $218 because I didn’t have the money for me to fund my first semester at the University of Missouri St. Louis. She wrote the check to the bursar. It was a physical check. Remember those? We got the check, took it to the bursar, and she saw that I did decently in my first semester. And she said, you should go to a four-year school. And I did. And then the rest is where I’m at.

So what is the importance of that story? I think for all of us is that when that happened, Betsy and I met when I was like 16-ish, almost 17. She was 32. So here’s a 32-year-old woman who meets with this 16, 17-year-old kid in the car, having coffee, changes my life. And it reminds me that we all have the power to be a Betsy.

And it’s probably true that no matter what circumstances people come from, they all need a Betsy. And so the kind of message is whether we’re bankers or Federal Reserve presidents or any person out there, that this idea that small things, you don’t have to spend tons of time. You just have to have a way to look at the world and a belief that you see something in someone, that they can’t see in themselves, that makes their life more possible. And it was that little thing. She never told me what to do. She never wrote out a roadmap. She simply nudged me in a direction that I would never in a million years have thought of. And it was amazing, transformational. And I try to practice that in my world, but it’s just remarkably easy because there are so many people, especially young people right now, or small businesses or anyone really, who is trying to figure out the relatively rapid change world we live in. Super dynamic changes, not sure how to position themselves.

Students are worried about AI and jobs and the economy, and just those little things of: I believe in you, or here’s something I see, or I did this and you might be able to do that. It really is, it’s transformational. And so that’s what I think, whether you’re contributing to your customers or your employees or each other, it’s like you can do something that you don’t even imagine is true.

I’ll leave you with this on that front. So yesterday I talked about having a GED, and this gentleman who is at the university came up to me, works at the university, and he said, you talked about having a GED like you were okay with it, like you were proud of it. But he said it almost as a way that says you weren’t ashamed of it.

And he said, I’m going to start doing that, because he has one too. And I thought, that’s just the tiniest thing. I just said something about myself that allowed this other gentleman to then go off and maybe tell other people he has one, and then help other people who might’ve said, well, I don’t know. I didn’t want to come in and say I went here or there. So I just think it’s a power I only could reflect on later in life, when I realized how transformational Betsy had really been in my life. But it’s a power that I think we all have inside of us.

Mark Packard:

Well, thank you and thank you for what you do at the Federal Reserve. You do make a difference, not only in those circles that you know, but well beyond that. So as bankers, we appreciate the Fed and what they do, and we understand their dual mandate and appreciate all of the pressures and the strains that come with that. So thank you very much, and thank you for being with us today.

Mary C. Daly:

Oh, my pleasure. My complete pleasure. I love bankers, as you guys know. If you’ve ever met me, you know that story. I ask you like a thousand questions.

Mark Packard:

Well, let’s give her a round of applause.