Dallas Fed's Logan signal cut requires U.S. labor market cooling

(Rueters) - Dallas Federal Reserve Bank president Lorie Logan said Thursday that even if inflation is closer to the Fed's 2% goal, she is ready to keep interest rates "for quite some time" as long as the labor force The market has not wavered. .

She said she would think the combination of slowing inflation and a strong labor market is evidence that monetary policy has no meaningful restrictions.

She said in the good news that in her speech preparing to deliver the bank to the Mexico City International Settlement Bank Conference, “this does not necessarily allow (the Federal Reserve) to lower interest rates as soon as possible.”

Instead, she said, “We are strongly advised that we are already very close to neutral speeds without much near-term space for further cuts.”

On the other hand, she said: “If the labor market or demand cools further, it may be time to ease.”

Last week, the Fed made a slower progress than lowering inflation, and its short-term policy interest rate remained within the range of 4.25%-4.4.50%.

Jackson Hole Economics Seminar

Fed Chairman Jerome Powell said the central bank is not in a hurry to cut it further, adding that inflation or weakened job markets need further cooling to prompt further policy easing.

The 12-month change in the personal consumption expenditure price index through targeted measures in the United States was actually ticked before the end of last year and earned 2.6% in December.

Logan’s suspicion of lowering interest rates is based solely on an increase in inflation, which adds focus to the labor market, which remains strong, with unemployment falling to 4.1% last month.

The Labor Department will release data in February, and economists expect job growth to cool down but not collapse.

US Federal Reserve Chairman Jerome Powell answered David Rubenstein’s question (not shown) at a meeting of the Washington State Economic Club in Washington, DC, Washington, DC, USA, February 7. /Amanda Andrade-rhoades — US Federal Reserve Chairman Jerome Powell answered David Rubenstein during a stage discussion in Washington, DC, during a meeting at the Washington State Economic Club in Washington, DC. Rubenstein's problem. /Amanda Andrade-rhoades · Reuters/Reuters

Logan noted that there is a range of uncertainties that could impact the Fed’s path, including trade policies under the Trump administration and turbulent financial situation.

“For me, the monetary policy impact of these uncertainties often depends on whether the price stability of sustainable recovery needs to be at least at current levels or at a slowdown,” she said.

(Report by Ann Saphir; Edited by David Gregorio)