The Federal Reserve Board building in Washington in an August 2008 archive photograph, not the Dallas Fed or Logan’s Davidson College appearance. Photo: AgnosticPreachersKid / Wikimedia Commons. Resized under CC BY-SA 3.0.
Dallas Federal Reserve President Lorie Logan said Friday that the central bank needs at least two more quarter-percentage-point interest-rate increases, arguing that inflation remains too high while the labor market is broadly balanced.
In remarks prepared for Davidson College, Logan said the current 3.75% to 4% federal funds target range is at least half a percentage point below a level that would put modest restraint on the economy.
“It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-basis-point rate increases,” she said. After that, she said, a pause would make sense while officials reviewed economic and financial developments.
Logan supported keeping rates unchanged at this week’s Federal Open Market Committee meeting, following a quarter-point increase in September. Skipping a meeting, she argued, does not change the policy destination, while a more gradual pace can help households and businesses adjust during financial-market volatility.
She pointed to core personal consumption expenditures inflation of 3.1% over the year through September, above the Fed’s 2% overall inflation target. Price pressures were broad, she said, rather than limited to tariffs and the energy shock.
Logan described economic growth and consumer spending as strong, with unemployment just above 4%. But she said the job market remained difficult for new graduates and others seeking work because companies were slow both to hire and to fire.
The comments represent Logan’s views, not a new FOMC decision or a promise that the committee will raise rates. She said she would change her policy outlook if conditions and risks changed.
JBizNews Desk | Washington
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