Dallas Federal Reserve President Lorie Logan on Friday said it's not clear if monetary policy is tight enough to bring inflation down to the U.S. central bank's 2% goal, and it is too soon to be cutting interest rates.
There are still good reasons that inflation will return to the Fed's 2% goal in the coming years, Logan told the Louisiana Bankers Association's annual conference. "There are also important upside risks to inflation that are on my mind, and I think there's also uncertainties about how restrictive policy is and whether it's sufficiently restrictive to keep us on this path."
The U.S. central bank last week kept its policy rate in the 5.25%-5.50% range, with Fed Chair Jerome Powell noting a lack of progress on inflation so far this year means rates will likely need to stay where they are for longer than previously thought.
"As I think about appropriate policy, I think it's just too early to think about cutting rates," Logan said on Friday. "I think I need to see some of these uncertainties resolved about the path that we're on, and we need to remain very flexible to policy, and continue to look at the data that's coming in and to watch how financial conditions are evolving and make sure the judgments that we're making are appropriate"
