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Dallas Fed President Lorie Logan calls for at least 50bp more hikes

Logan said September’s 25bp increase to 3.75% to 4.00% was a first step, but inflation may need more tightening to move toward the Fed’s 2% goal.

Reported · Written up by our desk · Central Banks

Dallas Fed President Lorie Logan said on October 1 that US policy rates likely need to rise at least another 50 basis points, or more, for policy to be “modestly restrictive” and to put inflation more firmly on course toward the Fed’s 2% target, according to remarks reported by Action Forex.

Logan described September’s 25bp hike to a 3.75% to 4.00% target range as an “important first step,” but said inflation may not fall much below 2.5% without further tightening as the Fed works to “restore price stability.”

She argued the economy is strengthening and the labor market remains well balanced, which leaves little evidence that current policy is sufficiently restrictive, and she suggested additional increases would help reverse last year’s precautionary easing, undoing what she called the FOMC’s risk management cuts from last fall.

At the same time, Logan acknowledged uncertainty about the exact restrictive rate needed to restrain demand, noting that the restrictive level can change with broader financial conditions.

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