(Reuters) - San Francisco Federal Reserve Bank President Mary Daly on Friday said she believes the U.S. economy and monetary policy both are in a "good place," and the risks have grown more balanced while there is still work to do to bring down inflation, .
The words calibration, patience and gradualism suggested Daly believes Fed rate cuts will arrive but are not imminent.
Unlike last year, when the focus was on fighting inflation, Daly said this year there is more need for attention to the Fed's other mandate, of achieving maximum employment.
"The risks to the economy are balanced, and the risks to both sides of our mandate are balanced," she said.
Early Friday Daly said it would be "premature" to think interest-rate cuts are around the corner. Inflation has come down from its 2022 peak but is still too high, she said, noting the December reading on core consumer price inflation, of 3.9%.
"There is a lot of work to do. There is no denying it," she said.
The Fed targets 2% inflation, though by a different yardstick than Daly cited. By that measure, the personal expenditures price index, year-over-year inflation measured 2.6% in November, the latest reading available.
Other policymakers speaking recently, notably Fed Governor Christopher Waller this week, have sounded more optimistic on inflation's trajectory.
Daly is likely the last Fed policymaker to speak publicly ahead of the Fed's Jan 30-31 policy meeting, due to an agreed-upon quiet period running up to each meeting.
(Reporting by Ann Saphir; editing by Jonathan Oatis and David Gregorio)
