By Michael S. Derby
May 1 (Reuters) – Federal Reserve Bank of Dallas President Lorie Logan said on Friday uncertainty over the outlook and ongoing concerns about inflation means the central bank should not be sending signals that the next policy move will be a rate cut.
“When the FOMC gives forward guidance, it is important for that guidance to reflect the policy outlook. In light of the two-sided risks to monetary policy, I believed the FOMC should not give forward guidance implying a bias toward rate cuts at this time,” Logan said in comments that explained why she dissented against the language in the Federal Open Market Committee meeting statement this week.
Logan joined with two other regional Fed bank presidents and voted against language suggesting the Fed’s next move would be a rate cut. She supported the Fed’s decision to hold its interest rate target steady at between 3.5% and 3.75%.
“The economic outlook is highly uncertain” amid ongoing worries about high inflation returning to 2%, Logan said. Given the outlook, “it could plausibly be appropriate for the FOMC’s next rate change to be either an increase or a cut,” she said.
(Reporting by Michael S. Derby; Editing by Andrea Ricci)
Comments