Dallas Fed President Lorie Logan said, “we must remain prepared to continue rate increases for a longer period than previously anticipated, if such a path is necessary to respond to changes in the economic outlook or to offset any undesired easing in conditions.”
“And even after we have enough evidence that we don’t need to raise rates at some future meeting, we’ll need to remain flexible and tighten further if changes in the economic outlook or financial conditions call for it,” she added.
“The most important risk I see is that if we tighten too little, the economy will remain overheated and we will fail to keep inflation in check,” Logan said. “That could trigger a self-fulfilling spiral of unanchored inflation expectations that would be very costly to stop.”
“My own view is that, given the risks, we shouldn’t lock in on a peak interest rate or a precise path of rates,” she said.
