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Central banks and governments are running out of room to provide more stimulus and that creates big risks for the global economy, which San Francisco Federal Reserve President Mary Daly on Friday called one of her top concerns.

"The Federal Reserve, and central banks across the globe, already are out of policy space if you think about how many are constrained by the zero lower bound. We've already had to bring out our alternative toolkit, asset purchases, et cetera, to mitigate the outcomes of shocks, and so I really worry a lot about that," she said during an online event. "How do we respond when we are going to repeatedly hit the zero lower bound, when the fiscal agents aren't able to absorb in the way that they might have been if we had less debt across the globe?"

"Societies and economies are going to have to imagine what do we do when our buffers are low," she said.