Logan added that the Fed’s job is to ensure a one-time increase in prices does not translate into persistent inflation because of interest rate cuts.
Dallas Federal Reserve Bank’s President Lorie Logan on Monday reiterated that the Federal Open Market Committee’s (FOMC) decision to wait and watch the data to tailor its interest rate actions is sound.
In a speech at a banking conference, Logan backed Federal Reserve Chair Jerome Powell’s approach to rate cuts, despite pressure from President Donald Trump to ease monetary policy, according to a Reuters report.
Logan underscored that the labor market is stable and the inflation is slightly above the Fed’s 2% target. With President Trump’s tariffs causing uncertainty, she added the Fed is keeping a close watch on data to fine-tune its response.
"Monetary policy is really well positioned for us to wait and be patient and watch the data, knowing that if the risks are to materially change on either side, we're well positioned to act,” she said.
Logan added that the Fed’s job is to ensure a one-time increase in prices does not translate into persistent inflation because of interest rate cuts.
She also expressed concern that tariffs-induced inflation could outlast the economic slowdown due to the levies, and that the risk is that these issues become “entrenched.”
Boston Federal Reserve President Susan Collins thinks it’s possible that the Fed could announce no cuts in 2025.
“We’re seeing some signals and certainly the conversations that I’m having with different stakeholders across a range of sectors, point to an expectation of needing to pass through some of the increases in cost to consumers,” she said.
Meanwhile, the SPDR S&P 500 ETF Trust (SPY), which tracks the S&P 500, was up 0.14% at the time of writing.
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