Fed Daly Warns: Uncertainty Demands New Approach.

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On Monday, March 23, 2026, “Policymakers are forced to adopt a scenario-based strategy accompanied by elevated uncertainty,” says Mary Daly from the Federal Reserve. The Fed is shifting towards flexible decision-making rather than a fixed-rate path, as inflation, labor risks, and geopolitical tensions evolve.

Scenario-based Policy Approach Pushed by Fed’s Daly.

Mary Daly, San Francisco Federal Reserve President, says, “Policymakers are reshaping their approach to interest rate decisions because of elevated economic uncertainty”. Adopting a scenario-based framework instead of relying on a single outlook, allowing flexibility, as the labor market conditions, inflation, and geopolitical risks continue to be unpredictable, is a move to a more adaptive and data-driven monetary stance in 2026.

Traditional Vs Scenario-Based Fed Policy Table:

The Era of Policy Uncertainty.

Certainty is no longer possible as the Fed enters a complex phase, with policymakers aiming to stay agile as they adopt a scenario-based approach. However, for the markets, it means adapting to less clarity and more volatility ahead.