San Francisco Federal Reserve Bank chief of research Mary Daly stands near the podium before a speech at the CFA Society in San Francisco, California, U.S. July 10 2018.
San Francisco Federal Reserve Bank chief of research Mary Daly stands near the podium before a speech at the CFA Society in San Francisco, California, U.S. July 10 2018. Reuters / Ann Saphir

San Francisco Federal Reserve Bank President Mary Daly said Tuesday she believes the "main risk" to the economy is from too-high inflation that could get worse as Russia's invasion of Ukraine boosts oil prices and China's crackdown on COVID-19 further disrupt supply chains.

"It's time to remove accommodation," Daly said at a virtual Brookings Institution event, "marching" rates upward to and perhaps above a neutral level to rein in inflation and more strongly anchor inflation expectations. "I'm already focused on let's make sure this doesn't get embedded and we see those longer-term inflation expectations drift up."