Federal Reserve Bank of San Francisco President Mary Daly stated on Tuesday that the central bank made progress on inflation and employment but risks for the economy remained.

Daly noted the public expects inflation to keep going down over time, stressing that she still expects the economy to encounter "bumps, disturbances, and scares." At the same time, she said the Fed's monetary policy can still be considered restrictive, adding that the progress toward the central bank's goals is "not assured."

According to Daly, the neutral rate is now higher than in the past and may be somewhere around 3%. Fed managed to reduce inflation without major disturbances, she concluded.