Most of her peers are men with Ivy League degrees. By contrast, Daly is a petite gay woman who attended state schools, has a skateboard and welds metal sculptures in her spare time.

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By the time she was 16, Mary C. Daly was a high-school dropout in a small town outside St. Louis who believed her best option in life was to become a bus driver.

“I only knew what was right in front of me,” said Daly. “My aspiration was to get a full-time job.”

Today Daly, 56, is president of the Federal Reserve Bank of San Francisco, making her one of the most powerful shapers of economic policy in the United States. In this position, which she started in October, Daly helps set interest rates.

Low rates spur people to spend and borrow more, and high rates cause loans and economic activity to slow. Right now U.S. interest rates are roughly at a level that neither helps nor hurts the economy, but Wall Street and President Donald Trump are anxious how much higher the Fed will go. Daly voted for the last rate hike in December.

Her journey from high-school dropout to central bank leader is, in many ways, a quintessential story of grit and hard work paying off. But Daly believes she wouldn’t be where she is today if it weren’t for Betsy Bane, a mentor who told Daly to get a GED and paid for her first semester at the University of Missouri-Kansas City.

Bane told her, “Don’t give up just because people say nobody like you has ever done it.”

These days, as Daly sits in a top-floor office with jaw-dropping views of San Francisco Bay, she ponders how different life would be if she didn’t attend college.

“I think about that every day,” said Daly, whose father, a postal worker, and mother, a homemaker, didn’t get beyond a high-school education.

Daly is a trailblazing Fed leader. Most of her peers are men with Ivy League degrees. By contrast, Daly is a petite gay woman who attended state schools, has a skateboard and welds metal sculptures in her spare time.

A top goal for Daly in her position is boosting the number of Americans with college degrees and mentoring others coming up the ladder behind her.

Only 37 percent of Americans age 25 to 29 have a college degree — a low figure, she argues, given that more jobs will require a bachelor’s degree than a high-school diploma by 2020. The likelihood of a child growing up to be better off than his or her parents has declined sharply, according to research by Harvard scholar Raj Chetty and others.

“One of the reasons my story is unusual is because it’s not very frequent, but we should make it more frequent,” said Daly, her voice rising with enthusiasm. “As adults, we all have to look around — and I try to look around everywhere — and just mentor people.”

The official mandate of a Fed leader is to keep unemployment low and inflation stable, mainly by setting interest rates. The Fed’s leadership consists of seven governors based in Washington, D.C., and appointed by the president, and 12 regional bank presidents such as Daly who sit in different parts of the country and are appointed by local selection committees. Daly’s district includes much of the West — Alaska, Arizona, California, Hawaii, Idaho, Nevada, Oregon, Utah and Washington.

As a Ph.D. economist, Daly is happy to discuss the health of the U.S. economy and her detailed forecast of what’s ahead. She predicts “solid” growth for 2019 that’s a little slower than last year and sees “nothing in the data” suggesting an imminent recession.

On interest-rate hikes, she’s leaning toward pausing for a while to see how the economy progresses, a view that many of her Fed colleagues have also articulated in recent days as uncertainty has risen about the markets, trade and the government shutdown.

However, she says the U.S. economy faces deeper problems than interest rates alone can solve.

The American dream is “alive, but maybe not well,” Daly said in a podcast she co-hosted in 2017. Today’s high-paying jobs typically require a college degree, which few low-income students obtain.

“For the American dream to be revitalized, we have to be more intentional about educating our population,” Daly said in an interview this month. “Right now, we’re leaving a lot of talent on the table. We’re just leaving people less educated than they could be.”

From her years studying the job market, Daly knows the No. 1 factor that can increase a person’s wages and career prospects is a bachelor’s degree, not community college. More broadly, she argues the nation needs more college-educated people to boost economic growth and productivity.

“The four-year degree is where you see the big payoff,” she said. “I would like us to have a national discussion about how important it is to have a more educated population for our potential growth going forward and our productivity.”

Historically, Fed leaders have focused on monetary policy and bank regulation, but Daly is part of a growing group of regional Fed presidents who believe the long-term health of the U.S. economy depends on “upskilling” U.S. workers and revitalizing communities that have been left behind. They want to work on initiatives to address these big issues.

Daly’s latest initiatives include a “first gen” campaign highlighting how many people at the San Francisco Fed were the first in their families to graduate college, and a new podcast, Zip Code Economies, that aims to put a face on mobility issues.

She also thinks  she can have a big impact by jump-starting conversations as she travels around her district to meet with business leaders, universities and community organizations. On a recent visit to Idaho, she spoke with corporate leaders about the importance of more college-educated workers. The group immediately began brainstorming ideas, such as contributing to their employees’ college savings, much like they do with 401(k) retirement plan matching.

Wherever she goes, Daly encourages mentoring and ways to simplify college applications, especially for financial aid. She says she knows the benefits firsthand.

Daly was a good student as a child (except for spelling), but she says at some point her family “just sort of imploded,” making it impossible to focus on school, so she dropped out at age 15.

Her dad lost his job, a hardship for the family, and her parents ultimately divorced. Daly moved in with friends while her siblings went to live with her grandparents, who ran a doughnut shop where Daly did everything from icing doughnuts to delivering treats to help out and earn money.

Even after she dropped out, Daly’s school guidance counselor didn’t give up on her. As fate would have it, the counselor was having dinner with a friend named Betsy Bane, who had a doctorate  in psychology and was teaching at a local university. When Bane heard about Daly, she was intrigued and told the counselor to give Daly her number.

To Bane’s surprise, Daly called her. “She was 15 when I first met her. Just in survival mode. She was supporting herself and treading water, but she was clearly articulate and very bright,” said Bane, who advised Daly to get a GED.

Daly eventually earned her GED at age 17, taking the test without studying much and “getting the highest score of anybody,” Bane recalled.

Bane then suggested college, a path Daly had never considered and worried she couldn’t afford. Bane offered to pay for the first semester and remembers writing a check for $216.

Daly excelled in classes and, after a stint in the psychology department, switched to economics, later earning her master’s degree in economics at the University of Illinois at Urbana-Champaign and her doctorate  from Syracuse University in New York.

When Daly was named president of the San Francisco Fed — the second woman in the bank’s 105-year history to hold the post after Janet Yellen — Daly sent Bane an email to thank her. Daly has since set up a scholarship at her alma mater in honor of Bane.

“To be a small part of what Mary accomplished is really something special,” said Bane, now 75. She added that there are “a lot of little diamonds” in America no one notices.

Cheers rang through the San Francisco Fed the day Daly was named to the post, and the following morning many staff members gathered in the lobby to applaud her again, recalled Fernanda Nechio, an economist and researcher at the bank. Daly came to the bank in 1996, was mentored by Yellen and moved up the ranks to become research director before being named president.

Nechio said she thinks there is so much admiration for Daly because she “felt like someone we could look up to.”

Several years ago, in an effort to increase diversity at the bank, Daly sent letters to hundreds of colleges to spread the word about the bank’s research-assistant program for recent college graduates looking to gain experience before earning a doctorate.   Then, she personally called everyone accepted into the program, a process she described as putting out the “welcome mat,” to let people know there is a place for them at the Fed, regardless of their background.

Since then, the percentage of female research assistants at the San Francisco Fed has increased from 20 to a 50 percent split with males.

Mary Daly

Age: 56

Position: President of the Federal Reserve Bank of San Francisco

Education: Earned a GED at 17 after dropping out of high school; eventually got a Master’s degree and a Ph.D. in economics, the latter from Syracuse University.