Dallas Fed President Lorie Logan said Tuesday the Federal Reserve could raise rates faster this winter than it has this fall, while favoring at least two more quarter-point increases before a pause.
At a joint Dallas and Kansas City Fed energy conference in Houston, Logan said she would review the economic and financial outlook after those increases before deciding on the next policy step.
The Fed raised its federal funds target range by a quarter point in September and held it at 3.75% to 4% at its Oct. 27-28 meeting. Logan supported the October hold amid market volatility, saying that spacing rate moves over time could reduce disruption to economic activity.
Logan said inflation had remained above the Fed's 2% goal for close to six years. The personal consumption expenditures (PCE) price index rose 3.6% in the 12 months through September. She estimated that the target range was at least 50 basis points below a level that would create some modest restraint and begin bringing the inflation trend toward the Fed's goal.
She cited higher energy prices, wartime disruptions and broader price pressures as contributors to inflation. Comparing energy prices with the previous year's conference, Logan said crude oil was up close to 50% on net and European natural gas prices remained more than twice as high. She said excess inflation weighs on families, businesses and taxpayers, while some workers' pay has fallen behind living costs.
The remarks continued Logan's earlier call for two more increases before a pause. The Bureau of Labor Statistics reported Tuesday that the Consumer Price Index rose 0.4% in October, while the index excluding food and energy increased 0.3%.
The Fed's next meeting is scheduled for Dec. 8-9. The November CPI report is scheduled for Dec. 10 at 8:30 a.m. ET.
