Logan Raises Doubts on Sufficiency of Monetary Policy in Curbing Inflation at LBA Conference

In a speech delivered at the Louisiana Bankers Association’s annual conference, Dallas Federal Reserve President Lorie Logan expressed doubts over whether current monetary policy is sufficient to bring inflation back to the US central bank’s 2% target. Logan highlighted “important upside risks to inflation” and acknowledged uncertainty regarding the degree of restriction required to maintain a path towards the desired outcome. While acknowledging that the Federal Reserve (Fed) has yet to determine whether further tightening is necessary, Logan suggested that it may be premature to contemplate rate reductions as she called for continued observation of incoming economic data and monitoring of financial market developments. The Fed recently announced that it would leave its policy rate within the 5.25%-5.50% range following a lack of notable progress in reducing inflation during the opening months of the year. Fed Chair Jerome Powell warned that rates might be required to remain unchanged for an extended period beyond previous predictions. Logan’s statements come amidst mounting worries over inflation, which have led to declining consumer sentiment in the United States.