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"Forecasts are inherently uncertain. My base case, though, is
that there is work left to do," she said in remarks prepared for
delivery to the Dallas Business Club at Southern Methodist
University. "After the unacceptably rapid price increases of the
past several years, I’m not yet convinced that we’ve
extinguished excess inflation."
The Fed has raised its policy rate a total of 5.25 percent
points since March 2022 in a battle against inflation that at
its peak last year hit 7% by the Fed's preferred measure, the
personal consumption expenditures price index.
Inflation has since slowed, to 3.3% in July, and the Fed has
dialed down the pace of its rate hikes as well, even skipping a
rate increase at its June meeting before delivering its most
recent quarter-point hike in July, bringing the target range for
the policy rate to 5.25%-5.5%.
"Another skip could be appropriate when we meet later this
month," Logan said, referring to the Fed's upcoming Sept. 19-20
meeting. "But skipping does not imply stopping."
Lower inflation is "encouraging" but it isn't necessarily low
enough, she said, especially with labor markets still strong --
unemployment is 3.8% and there are still 1.5 jobs for every job
seeker.
And stronger economic growth -- retail sales and consumer
spending came in high in July, and housing construction has
rebounded after slowing earlier this year -- also puts potential
upward pressure on prices.
"I believe we must proceed gradually, weighing the risk that
inflation will be too high against the risk of dampening the
economy too much," she said. "In coming months, further
evaluation of the data and outlook could confirm that we need to
do more to extinguish inflation."
(Reporting by Ann Saphir; editing by Diane Craft)
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