Fed's Logan
- Upside risks to inflation mean Fed should not rush to reduce rates
- I continue to see a meaningful risk inflation could get stuck above target
- Lowering policy rate gradually would allow time to judge how restrictive monetary policy may or may not be
- Normalizing policy gradually also allows Fed to 'best balance' labor market risks
- Less restrictive policy will help avoid cooling labor market more than necessary
- Progress on inflation has been broad-based, labor market has cooled but remains healthy
- Inflation, labor market 'within striking distance' of Fed goals
- As labor market has cooled, we case more risk it will cool beyond what is needed to get inflation to return to 2%
- Spending and economic growth that's stronger than forecast poses upside risk to inflation
Logan is a hawk but she's not pushing for any kind of a pause in rate cuts. The market is pricing in a 12% chance of no move in November but that looks high to me.
