Dallas Fed Pres. Lorie Logan speaking (hawk):
- Continued restrictive financial conditions it will be necessary to bring down inflation.
- In setting policy rate, Fed must take account of financial conditions, which have taken substantially in recent months.
- If higher long-term rates are due to higher term premiums, there may be less need for Fed to raise rates.
- Higher term premiums have clear role in higher long-term rates, uncertain how big
- To the extent a stronger economy is behind rising long-term rates, Fed may need to do more.
- Attentive to wrists on both sides of Fed’s mandate. High inflation is the most important risk
- Progress on inflation encouraging but too early to be confident it is heading to Fed’s 2% target in a sustainable, timely way.
- Labor market is still very strong, wage is still solid.
- Output, spending have been surprisingly strong, outlooks for consumer are mixed
Logan is characterized more as a hawk, and although she comments that continued restrictive financial conditions are still necessary to bring inflation lower, she does also acknowledge that the higher rates seen in the market are doing some of the tightening for the Fed.
This article was written by Greg Michalowski at www.forexlive.com. Source