Fed's Logan
- Premature easing of financial conditions could allow demand to pick back up
- If we don't maintain sufficiently tight conditions, there is a risk inflation will pick back up, reversing progress
- Appropriate to consider parameters to guide decision to slow Fed's balance sheet runoff
- Labor market 'still tight' but continues to rebalance
- Financial system overall has 'more than ample' bank reserves and liquidity, though no longer 'super abundant'
- Inflation in a 'much better place' than last January but Fed's job is not yet complete
- We should slow the pace of asset runoff as the Fed's overnight reverse repurchase balances approach a low level
The Fed's repo balances should approach a low level around mid-year so we should start to hear more talk about slowing the pace of runoff soon, though I don't think it will be much of a factor for markets (though others disagree).
Overall, Logan doesn't sound like someone who is even close to supporting a rate cut.