MNI: Logan Says May Soon Be Appropriate For Fed To Slow Hikes

Dallas Fed President Lorie Logan said on Thursday the October CPI data were a welcome relief and it may soon be appropriate to slow the pace of rate increases to better assess how financial and economic conditions are evolving, but the central bank still has a long way to go.

"While I believe it may soon be appropriate to slow the pace of rate increases so we can better assess how financial and economic conditions are evolving, I also believe a slower pace should not be taken to represent easier policy," she said in openings remarks at a Fed conference.

"I don’t see the decision about slowing the pace as being particularly closely related to the incoming data," she added. "The restrictiveness of policy comes from the entire policy strategy—not just how fast rates rise, but the level they reach, the time spent at that level, and, importantly, the factors that determine further increases or decreases."

U.S. CPI came in at a softer-than-expected 7.7% in the year to October, cementing market expectations for a stepdown in rate hikes to a 50 basis point pace in December after four consecutive 75bp moves.

"The FOMC can and should adjust other elements of policy to deliver appropriately tight conditions even as the pace slows. We must remain firmly committed to our 2% inflation goal," she said in opening remarks at a Fed conference. "Inflation is much too high. The FOMC must restore price stability—but must also proceed in a way that allows us to better assess how financial and economic conditions are evolving."

Richmond Fed President Thomas Barkin told MNI in an interview Wednesday that the Fed’s ultimate peak in rates might need to be higher due to stubbornly high inflation.