Fed’s Logan: All of us have been surprised by resilience of US economy

  • Inflation remains too high
  • The core question is if financial conditions today are sufficiently restrictive
  • Labor market is still too tight
  • Still looks like trending towards 3% inflation
  • We’ll need to see tight financial conditions to bring inflation to 2%
  • My expectation is we’ll see growth slow but we’ve been wrong before
  • Key question on long-term rates is what was driving it
  • If it was on the back of strong economic growth, FOMC would have to deliver on expectations
  • If rise in long end driving by term premium, it could do some of the Fed’s work
  • Will watch to see if retracement of long-rates continues

She’s sounding more hawkish here.

This article was written by Adam Button at www.forexlive.com. Source