MNI BRIEF: Fed's Logan Looking For Restrictive Conditions

Dallas Federal Reserve President Lorie Logan said Tuesday the core question for policy makers is whether financial conditions are sufficiently restrictive to return inflation to 2% in a timely and sustainable way.

Logan acknowledged inflation has been coming down but said it remains "too high" and the labor market generally remains too tight, although there has been some important cooling in recent months. "Since the most recent FOMC meeting, we have seen some retracement in the 10-year yield and financial conditions," she said. "I'll be watching to see whether that that continues and what that means for the implications of policy. So importantly I'm going to be looking at the data and I'm going to be looking at financial conditions as we get closer to the following meeting."

"Looking at inflation, we did get a string of better data, so we got some welcome news over the course of a few months. But the most recent reading was fine and when I take a step back and look at the inflation readings, more broadly, it still looks like we're trending towards 3% as opposed to 2%," she said. "We're going to continue to need to see tight financial conditions in order to bring inflation to 2% in a timely and sustainable way."

"All of us have been surprised over the course of the last year with how resilient the economy has been with growth really performing above trend," she said at a Fed conference on energy and the economy. "But we thought growth would start to slow before and have been surprised by the overall resilience."