Dallas Federal Reserve President Lorie Logan urged caution on Wednesday, advising the bank to move slowly with additional rate cuts to avoid unintentionally stoking inflation.
Key Quotes
– US central bank ‘most likely’ will need more interest rate cuts, but should ‘proceed cautiously’.
– Models show that Fed Funds rate could be ‘very close’ to neutral rate.
– If Fed cuts too far, past neutral level, inflation could reaccelerate.
– Difficult to know how many Fed rate cuts may be needed, and how soon they may need to happen.
– Fed has made ‘great deal of progress’ bringing down inflation, restoring balance to economy.
– Fed is not quite back to price stability yet.
– U.S. economic activity is ‘resilient.’
– Labor market ‘cooling gradually’ but not weakening materially.
– Rise in bond yields in part reflects rise in term premiums; if rise continues, Fed may need less restrictive policy.
Read the full article here
