An official at the US Federal Reserve: Thinking about reducing interest rates is premature

  • Lori Logan, President of the US Federal Reserve Bank in Dallas, said that it is not yet clear whether monetary policy has been tightened enough to reduce inflation to the 2% rate that the central bank is targeting, and that it is too early to cut rates.

 

  • Logan stated to the Louisiana Bankers Association's annual conference on Friday that there are still good reasons for inflation to return to 2% in the coming years.

 

  • She added, “There are also significant risks of rising inflation on my mind, and I think there are also doubts about the extent to which monetary policy has been tightened, and whether it has been tightened enough to keep us on this path.”

 

  • Last week, the US central bank fixed interest rates at a range ranging from 5.25 to 5.50%, in light of Federal Reserve Chairman Jerome Powell indicating that there has been no progress on inflation so far this year, which means that interest rates will likely remain as they are for a longer period than previously. expected before.

 

  • “When I think about the appropriate policy, I think it is too early to think about lowering interest rates,” Logan said.

 

  • “I think I need to resolve some doubts about the path we are on, and we have to continue to be very flexible on policy, continue to review the data coming in, monitor how financial conditions evolve, and make sure that the decisions we make are appropriate,” she added.

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