Technical Analysis

Fed’s Logan says she supports slowing pace of rate hikes at this next upcoming meeting

Federal Reserve Bank, Dallas President Lorie Logan says she wants a 25bp rate hike, not 50, at the January 31 / February 1 Federal Open Market Committee (FOMC) meeting.

  • Need to be flexible, robust
  • Not helpful at this
    time to lock in peak rate or precise rate path
  • Says she supports
    slowing rate hike pace further at fed’s upcoming meeting
  • If slower rate hike
    pace eases financial conditions, can offset that by gradually raising
    rates to a higher level than previously expected
  • Slower rate hike
    pace does not signal any less commitment to achieving inflation goal
  • Fed is committed to
    restoring price stability
  • Likely to need to
    gradually raise rates until ‘convincing evidence’ inflation on track
    toward 2%
  • Even after pausing
    rate hikes, may need to raise rates further if outlook or financial
    conditions call for it
  • Most important risk
    i see is tightening policy too little and failing to keep inflation
    in check
  • Elevated services
    inflation is symptom of overheated economy, tight labor market
  • Some signs of
    slower labor market, but would need to see a lot more data to be
    convinced it is no longer overheated
  • Tightening too much
    or too fast could weaken labor market more than necessary
  • Confident we have
    room to continue reducing balance sheet ‘for quite some time’
  • Would be
    comfortable seeing temporary use of fed’s standing repo facility

Dallas Fed Pres. Logan

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