Dallas Fed President Lorie Logan Calls for Two Rate Hikes

Lorie Logan, President of the Dallas Federal Reserve, stated on Tuesday that the Federal Open Market Committee must implement at least two more 25-basis-point interest rate increases to combat inflation. Speaking at an energy conference, Logan argued that prompt action is necessary to prevent broadening price pressures from becoming embedded in economic behavior, asserting that "excess inflation is unacceptable."

This call for tighter policy follows October consumer price data showing a 0.3% monthly increase, which would result in year-over-year inflation exceeding 4%, significantly above the Federal Reserve's 2% target. Logan noted that the longer above-target inflation persists, the greater the risk that it becomes baked into behavior.

While Logan supported skipping a rate hike last month to allow markets to adapt, she indicated that the central bank may need to move more rapidly this winter depending on the economic environment. The Federal Reserve's next policy meeting is scheduled for December 8-9.