Fed’s Logan says more rate hikes needed
Federal Reserve Bank of Dallas President Lori Logan said Thursday there was a case for a rate hike at the June policy meeting, comments that reaffirmed her view that more rate hikes are needed to calm the still-strong economy. May need it.
“It would be entirely appropriate to raise the federal funds target limit at the (Federal Open Market Committee) June meeting, consistent with the data we’ve seen in recent months and the Fed’s dual-mandate targets,” Logan said.
But given the “challenging and uncertain environment,” Logan said, “it may be prudent to skip any meetings and move slowly.” Logan noted that forecasts released at the June FOMC meeting showed the expectation of more growth, and added that “it is important for the FOMC to follow the signal we sent in June.” Two-thirds of respondents forecast at least two more rate hikes this year. way,” Logan said, “a sustained outlook for inflation above target and a stronger-than-expected labor market require more restrictive monetary policy.”
Delivering before a conference at Columbia University. A voting member of the Open Market Committee, Logan spoke a day after the minutes of the central bank’s June meeting were released, offering the latest details on the Fed’s decision to keep rates steady at its policy meeting last month. An aggressive campaign aimed at reducing high levels of inflation was halted.
Minutes of the meeting showed that nearly all central bankers agreed in a bid to maintain the overnight target rate set between 5% and 5.25%. Supported. To see how the cumulative impact of previous rate hikes was impacting the economy. Fed’s Logan says more rate hikes needed.
Officials were still concerned about inflation and flagged a still-strong job market, while a minority of policymakers expressed interest in raising rates at the June meeting. The June FOMC forecasts pointed to the possibility of raising rates by more than half a percentage point later this year.
And Fed officials such as central bank chairman Jerome Powell have called attention to the real possibility in recent comments that a tough campaign has not been launched. Speaking on Wednesday, New York Fed leader John Williams also said it was likely the Fed would have to raise rates again, but did not say whether he was in favor of a hike at the July FOMC meeting.
In his speech, Logan said that the economy, as shown by the job market and inflation, was stronger than expected in the first half of the year and added, “While labor market indicators have eased, the overall pace of rebalancing is higher than before.” remains slower than expected.” Logan also cast doubt on the idea that there is some wave of past policy action waiting to flow into the economy, saying, “I am skeptical of the potential for large additional effects from this channel.”
The official also said she is keeping an eye on commercial real estate risks, but does not consider them particularly dangerous. , He said the broader housing market appears to have bottomed out. Logan also said that he does not see any issues with the Fed’s balance sheet declines affecting the Fed’s rate options right now, and that the Treasury’s work on rebuilding its cash account is unlikely. With cash drawn from the Fed’s reverse repo facility, to infuse bank reserves.
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