Mary Daly, President of the Federal Reserve Bank of San Francisco, stated in a post on X that the Federal Reserve must maintain flexibility in its policy approach to effectively respond to rapidly evolving risks. Daly added that, given the current high level of uncertainty, there is no single most probable path for the economy. She outlined at least two potential scenarios for the U.S. economy: If conflicts in the Middle East de-escalate quickly, leading to a decline in oil and energy prices, the impact on the U.S. economy would be brief and limited. However, if the conflicts persist for a longer duration and disrupt energy supplies, the resulting cost pressures could become more sustained. This would increase the risks of heightened inflation, slower economic growth, and a weaker labor market. Daly noted that in such an uncertain environment, providing excessive forward guidance could potentially reduce transparency rather than enhance it. She emphasized that, regardless of how the economic situation unfolds, the best communication strategy and the appropriate policy focus should remain on restoring price stability and supporting maximum employment.