Dallas Federal Reserve Bank President Lori Logan said on Tuesday that it is difficult for the Fed to bring inflation down, and she expects two more rate increases will be needed.
The policy official said at an energy conference in Houston: "More restrictive monetary policy is needed to properly balance the outlook and risks for inflation and employment, and that balance must be achieved as soon as possible. The longer inflation remains above target, the greater the risk that inflation expectations become embedded in market behavior."
Earlier in the day, Fed Governor Christopher Waller said that a 25 basis point rate hike would be an appropriate choice at the next policy meeting in December. He even suggested that if inflation data comes in above expectations, as Tuesday's consumer price index (CPI) did, the Fed may need to raise rates by 50 basis points.
But Logan's view is that after two more 25 basis point hikes, the Fed can pause. She said: "The exact pace of increases depends on short-term economic and financial conditions. After completing those two hikes, I think it would be appropriate to pause, observe economic and financial conditions, and then judge whether further action is needed. Our goal is to keep monetary policy modestly restrictive so that we can sustainably achieve the dual mandate of full employment and price stability."
Logan holds a vote on the Federal Open Market Committee (FOMC), the Fed's rate-setting body, this year; in 2027 she will rotate to a non-voting member.
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