Dallas Fed President Logan said the Fed needs at least two additional 25bp hikes
(50bp total), then should pause to assess economic and financial conditions
before deciding next steps. Logan, who voted this week in the 10-2 FOMC decision
to keep the federal funds target at 3.75%-4.00%, said inflation still needs
further suppression and that at least 50bp more tightening is required to move
inflation back toward 2%. She warned that weaker tech investment prospects and
geopolitical tensions are increasing market volatility and argued gradual rate
increases will help households, firms and markets adjust while reducing the risk
of a sharp downturn. Logan urged clearer Fed communication of policy
plans—contrasting with Fed Chair Warsh’s view that such guidance is for crisis
periods—and said current financial conditions still support growth; higher
long-term borrowing costs largely reflect investors’ expectations for stronger
growth and higher rates, and skipping a meeting would not change the ultimate
policy objective.
