Dallas Fed President Lorie Logan says the Federal Reserve should deliver at least two more quarter-point rate increases. She warns that above-target inflation could become embedded in behavior if policymakers wait. The Fed's next meeting is on December 8-9.
Dallas Federal Reserve President Lorie Logan called for at least two additional quarter-percentage-point rate increases on Tuesday. She indicated the central bank may need to act quickly to stop widespread price pressures from becoming embedded in the economy.
Logan spoke at an energy conference sponsored by the Dallas and Kansas City Fed banks. She said excess inflation remains unacceptable and noted that consumer prices, excluding food and energy, rose 0.3% in October. At that pace, annual inflation would exceed 4%, well above the Fed's 2% target as measured by the Personal Consumption Expenditures Price Index.
Her call follows a pause. The Federal Open Market Committee raised rates by a quarter point in September but paused in October. Logan supported that pause, believing gradual increases let households, businesses and markets adjust more easily while reducing the risk of excessive economic slowdown.
Still, she left room for a faster pace. Logan said the exact pace could depend on the near-term economic and financial environment, adding that "It may be possible to move more rapidly this winter" than the committee has this fall.
She also said inflation stems not only from wartime energy disruptions or tariffs but from broader trends that may continue after recent shocks fade. As a result, she argued, tighter policy will be necessary and should come promptly, because the longer above-target inflation persists, the greater the risk it becomes baked into behavior.
The Fed's next policy meeting takes place on December 8-9.
Source: Investing.com
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