Dallas Fed's Logan Calls for At Least Two More Quarter-Point Rate Hikes Before Any Pause

Dallas Federal Reserve President Lorie Logan said on October 30 that the Fed needs to deliver at least two additional 25-basis-point rate increases before any halt to its tightening campaign, pushing back on the idea that the FOMC's recent decision to hold rates steady signals a change in direction. Logan said skipping a meeting does not change the policy destination, and that after 50 basis points of additional hikes a pause would make sense to assess what further action is appropriate.

The remarks came two days after the FOMC voted on October 28 to keep its benchmark overnight rate unchanged at 3.75%-4%, where it has been since a quarter-point increase in September. Logan noted that financial conditions are currently providing a tailwind to the economy rather than the restraint policymakers are seeking, and said the end goal is to bring policy to a modestly restrictive stance. Her comments signal that she views the current rate level as insufficient to durably return inflation to the Fed's 2 percent target.