Federal Reserve Bank of Dallas President Lorie Logan said that skipping an interest-rate hike at the US central bank’s upcoming policy meeting may be appropriate, while also signaling rates may have to rise further to get inflation back to 2%.
The Federal Open Market Committee, the group of Fed policymakers that sets rates, will gather on Sept. 19-20 and debate whether the current level of its benchmark lending rate is high enough to cool demand and price increases.
Logan added that officials will have to gauge whether monetary policy is now sufficiently restrictive to return inflation all the way to their 2% goal in a sustainable and timely way, or whether the FOMC still needs to do more.Read More: Fed’s Williams Says Policy in Good Place, Must Be Data Dependent
“Economic activity is picking up — contrary to expectations all year that the economy would slow down,” Logan said. “To sustain low inflation, supply and demand need to be in balance. Last year, labor demand greatly outpaced supply.”
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