Dallas Fed President Lorie Logan Calls for Rate Hikes
Lorie Logan argues the Federal Reserve must raise borrowing costs by at least 50 basis points to restore price stability and reach inflation goals.
Federal Reserve Bank of Dallas President Lorie Logan stated Thursday that the U.S. central bank needs to increase short-term borrowing costs by at least 50 basis points. Logan argued that this action is necessary to make monetary policy modestly restrictive and return inflation to the Federal Reserve's 2% goal, asserting that inflation is unlikely to drop below 2.5% without further tightening.
While Logan described the previous quarter-point increase to the current 3.75%-4.00% range as an important first step, she emphasized the urgency to restore price stability. She noted that the labor market remains balanced and the overall economy is strengthening.
Logan acknowledged that rising 10-year Treasury note yields, which recently reached a 24-year high, could reflect term premiums. She suggested these yields might slow the economy, which could potentially reduce the necessity for further tightening. However, she maintained that the target range must rise to appropriately balance the outlook and risks for the central bank's dual mandate goals.
