Fed’s Logan: Gradual rate reductions expected amid strong economy but risks persist

In a speech today, Dallas Fed President Lorie Logan said that if the economy continues on her expected path, a strategy of “gradually lowering the policy rate toward a more normal or neutral level” would help balance the risks and support Fed’s dual mandate of stable inflation and full employment.

Logan described the US economy as “strong and stable,” though she noted that “meaningful uncertainties” remain. Key risks include pressures on the labor market and Fed’s ability to sustainably meet its inflation targets.

Logan also stressed that Fed must “remain nimble and willing to adjust if appropriate”.