A Fed official argues current policy is insufficient to reach the 2% inflation target amid persistent price pressures.
Dallas Federal Reserve President Lorie Logan said interest rates may need to rise modestly to curb inflation, which remains above the Fed’s 2% goal. She cited core PCE inflation at 3.4% and stagnant progress in non-housing services as key concerns.
Logan noted that while June’s Consumer Price Index showed a decline, driven by lower energy and housing costs, one month of data is insufficient. She expects inflation to settle in the mid-2% range rather than fully returning to target.
The labor market remains solid, with unemployment averaging 4.3% and monthly job gains of 92,000, supporting the case for tighter policy. Logan emphasized the need to restore price stability to ease financial strain on households.