Federal Reserve Bank of Dallas President Lorie Logan is the latest Fed official to share her thoughts on monetary policy and what the next move should be, given rising inflation and a weakening labor market. This comes as the crypto market prices in a potential Fed rate cut at the next FOMC meeting, with Bitcoin on the rise.
Lorie Logan Cautious About Further Fed Rate Cuts
According to a Bloomberg report, the Fed president stated that she will approach additional rate cuts cautiously, as inflation risks remain more pronounced than the downside risk in the labor market. She noted that inflation is running above their 2% target and expects that the Trump tariffs could drive inflation higher in the coming months.
Logan is the latest Fed official to raise concerns about rising inflation amid calls for further Fed rate cuts. Fed Chair Jerome Powell raised this concern in his speech last week, although he acknowledged that the effect of the Trump tariffs on inflation may be short-lived. Meanwhile, more recently, Cleveland Fed President Beth Hammack has backed a restrictive monetary policy due to concerns about inflation.
The Dallas Fed president echoed a similar sentiment, stating that her forecast has a slightly slower normalization of the policy path to ensure that they bring inflation down to 2%. Logan admitted that this will take time, which suggests that she may not be in support of a Fed rate cut at the next FOMC meeting between October 28 and 29.
Meanwhile, Logan doesn’t believe that the current monetary policy is more than modestly restrictive. She claimed that it was appropriate since their goal should be to put downward pressure on inflation.
On The Weakening Labor Market
The Fed president admitted that there is a downside risk in the labor market but believes that the labor market looks “fairly balanced. CoinGape reported that the September ADP jobs report came in way lower than expectations, again signaling a decline in the labor market.
As a result, the market is pricing in another Fed rate cut at the October meeting, with the odds of a 25-basis-point cut at 97%. Federal Reserve Bank of Chicago President Austan Goolsbee stated during a Fox News interview that new data indicate the labor market remains stable. He added that the underlying economy is still growing “pretty solidly.”
However, Fed Governors Michelle Bowman and Stephen Miran do not believe that is the case and are advocating for further Fed rate cuts at the remaining FOMC meetings this year. Miran has gone as far as calling for a series of 50 bps cuts to help stabilize the economy.
