By Matt Grossman
Dallas Fed President Lorie Logan said she believes the Federal Reserve's interest-rate stance is set well for the risks facing the economy, a sign she may be reluctant to support a return to cutting rates at the central bank's upcoming meetings.
Cuts last year reduced the fed funds rate to a range of 3.5% to 3.75%, a level the Fed reaffirmed at its most recent meeting last month. Speaking at a financial conference in Austin, Texas, on Tuesday afternoon, Logan said that setting is about right for an economy facing both persistent inflation and a gradually cooling job market. The Fed's policy stance is likely near a level where it is neither boosting nor restraining economic activity, Logan said.
"Our policy is well-positioned to respond to risks to either of the FOMC's dual mandate objectives," Logan said in a published text of her remarks, referring to the Federal Open Market Committee.
The speech by Logan--one of the five regional reserve-bank presidents with a vote on monetary policy in 2026--mirrors remarks delivered earlier Tuesday by Beth Hammack, president of the Cleveland Fed, another 2026 voter who also expressed skepticism of further near-term rate cuts. Their comments suggest they could form a bloc of dissent on the FOMC this year should Fed Chair Jerome Powell--or Kevin Warsh, President Trump's nominee to succeed him--steer the central bank toward more rate cuts.
As reflected in their bets in interest-rate futures markets, traders remain confident the Fed will stay on hold at its next scheduled policy decision March 18. But the futures market suggests better than 4-in-10 odds that another Fed cut will come before May, when Powell's tenure as Fed chair ends.
Two key economic reports from the Labor Department--the January jobs report, due Wednesday, and the January consumer-inflation numbers, coming Friday--could scramble those expectations if they bring sharp surprises.
Logan expressed optimism that inflation will decline further toward the Fed's 2% target this year, but said she remains conscious of risks that progress could stall. Business-friendly tax policy, buoyant conditions in financial markets and lingering price increases from the Trump administration's tariffs could all work to push prices higher, Logan warned.
She acknowledged that the labor market has weakened--a development that prompted the Fed's three rate cuts between September and December last year--but said the outlook for jobs may now be stabilizing.
Since the middle of 2025, "monthly job gains have remained right around my staff's estimate of the break-even level needed to keep the unemployment rate stable," she said, adding that "jobs gains have not shown signs of a further slowing trend."
Write to Matt Grossman at matt.grossman@wsj.com
(END) Dow Jones Newswires
02-10-26 1315ET
