Economic news

Fed’s Logan: risks more balanced, no urgency on rate cuts

2024.02.09 15:41


© Reuters. Federal Reserve Bank of Dallas President Lorie Logan speaks at a convention of the National Association for Business Economics in Dallas, Texas, U.S., October 9, 2023. REUTERS/Ann Saphir/File Photo

By Ann Saphir

Hurst, Texas (Reuters) – Dallas Federal Reserve Bank President Lorie Logan on Friday stated she is in no rush to chop rates of interest, and whereas there was “tremendous progress” on bringing down inflation, she needs more information to verify the progress is sturdy.    “The risks that I’m seeing in the economy are becoming more in balance, but I do think we need to take time here to continue to look at the data,” she stated on the Tarrant Transportation Summit in Hurst, Texas.

She stated she supported the Fed’s choice final month to depart the coverage rate on maintain within the 5.25%-5.5% vary, at the same time as Fed Chair Jerome Powell signaled that rate cuts are doubtless later this 12 months.

“I’m really not seeing any urgency to make any additional adjustments at this time,” she stated, including that the labor market continues to be tight and she or he needs to “build our confidence whether the progress that we’ve seen on inflation will be sustained over the medium term.”

It’s a chorus that lots of Logan’s colleagues – together with fellow hawks like Richmond Fed President Thomas Barkin in addition to the more dovish-leaning Atlanta Fed President Raphael Bostic – have voiced of late: that there’s nonetheless more work to do on bringing down inflation, and the financial system’s energy means the Fed can maintain charges the place they’re to take care of that downward strain on costs.

Inflation is on the Fed’s 2% aim as measured on a six-month annualized foundation, she famous, and even on a year-over-year foundation it’s beneath 3%.

“I think we are in a good place,” she stated, with a “fairly benign outlook, with inflation continuing to be sustained near our target, with healthy growth and a labor market that’s loosening but still robust.”

But there are risks, Logan stated, together with the potential for geopolitical stresses or renewed provide chain issues to stall or reverse progress on inflation.

Logan stated the Fed’s ongoing shrinking of its stability sheet has been “going well,” although she didn’t provide any particulars or present her views on the outlook for when the Fed could sluggish or finish that course of.

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