Fed’s Logan calls for two more rate hikes; pause won’t alter path
On Friday, the Dallas Federal Reserve President Lorie Logan said that “at least two more quarter-point rate hikes” are needed. She added that skipping a hike “doesn’t change policy destination,” and that adjusting interest rates “gradually” reduces the risks of a sharp economic deterioration.
Federal Reserve President Lorie Logan of the Dallas branch has called for an additional two rate hikes of a quarter-point each. She emphasized that skipping a hike does not alter the policy target, and that a gradual adjustment in interest rates diminishes the potential for an abrupt economic downturn. Logan considered a pause in rate hikes unacceptable, as it would be necessary to assess the path forward after raising rates by 50 basis points.
The Federal Reserve still requires at least two more quarter-point rate hikes to effectively manage inflation. It is generally accepted that skipping a meeting does not change the policy destination. Gradual policy adjustments can reduce the risks of a sharp economic deterioration, and benefit households, businesses, and investors in adapting to higher rates.
The ultimate goal of the Federal Reserve is to implement a modestly restrictive monetary policy, which provides a clear direction for the economy to follow and allows it to reap the benefits of a potential rate pause.
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