Since John Williams officially took the reins at the New York Fed in June, investors have been waiting for the central bank to announce his successor. And on Friday afternoon, that wait came to an end: The Fed announced that Director of Research Mary Daly will take over the San Francisco Fed - a seat once held by former Fed Chairwoman Janet Yellen - making Daly the first openly gay female president of one of the 12 district banks in the Fed's 100-year-history.
As the Fed pushes for more diversity in its upper ranks, Daly will become one of only three women occupying a senior role.
Daly, who ran one of the most widely respected research departments among the 12 district banks, will officially take over on Oct. 1 after serving as an executive vice president since late 2017. Her appointment was approved by the Fed board of governors in Washington following an exhaustive search that included interviews with more than 230 candidates - a third of whom were minorities, and a third of whom were women, according to Bloomberg. She first joined the SF Fed in 1996, and has a PhD in economics from Syracuse University.
Crucially, Kansas City Fed President Esther George will cast San Francisco's rate-hike vote next week (George has been filling in for Williams as his official alternate). Daly will cast her first vote at the Fed's November meeting. However, the SF Fed has a reputation for being dovish, and Daly is widely expected to adhere to that view.
"I am truly honored to have been given this opportunity," Daly said in a statement. "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."
The appointment carries additional weight because Daly will occupy a seat once held by former Fed Chairwoman Janet Yellen, who ran the San Francisco Fed between 2004 and 2010. The San Fran Fed has a reputation for being dovish...
San Francisco Giants pic.twitter.com/7QrEbGNhQA— Ed Bradford (@Fullcarry) September 14, 2018
...and by the looks of it, Daly won't deviate much from this path.
We now wait to hear more about Daly's view on whether the Fed should leave rates in neutral.