Top Fed official signals support for rate hikes in July to tame “hot” eco...
president of the Dallas Fed and this year's voting member of the Federal Open Market Committee, revealed Thursday that she was among officials who thought a quarter-point interest rate increase in the June meeting was “entirely appropriate” in light of strong incoming data while laying out the case for the central bank to further squeeze the US economy. At the most recent meeting, officials unanimously supported a pause in the Fed's historic monetary tightening campaign after 10 consecutive interest rate hikes, but noted that a half-percentage point more of increases would be needed to sufficiently dampen demand. . In prepared remarks delivered at a Central Bank Research Association event, Logan said it was "important" for the Fed to "move forward" given its concerns about "whether inflation will return to target in a sustainable and timely manner" amid of what he described as “clearly quite hot” data.If we lose ground in our effort to restore price stability, we will have to do more to catch up,” he warned. Logan expressed skepticism that most of the impact of the Fed's previous rate hikes has yet to filter through the Job Function Email Database economy, arguing instead that "we've already had a good amount of time to see the overall effects of the monetary adjustment. The central bank has raised the federal funds rate by more than 5 percentage points since the beginning of 2022. One concern is that the housing market has “bottomed,” Logan said, and if recent signs of improvement gain momentum, it could pose an “upside risk to inflation going forward.
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Recommended Logan also rejected the idea that the banking stress that erupted earlier this year was having an outsized effect on credit availability across the economy. Officials, including Chairman Jay Powell, have cited these factors as reasons why the Fed should move more gradually at this stage in terms of additional interest rate hikes, although he recently admitted that "consecutive" moves should not be ruled out. . Speaking on Wednesday, John Williams, president of the New York Fed and a close Powell ally, said a pause in June was the right decision but acknowledged there was “more to do” regarding interest rate hikes.
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