Dallas Fed President Lorie Logan on Thursday said that if the Fed skips a rate hike at its meeting in two weeks, it doesn’t imply they will stop hiking for good.
The Fed skipped a rate increase at its June meeting before raising its benchmark interest rate by 25 basis points to a range of 5.25%-5.5% at its last meeting in July.
Economists and traders in derivative markets are fairly certain the Fed will skip raising rates again after the policy meeting on Sept. 19-20.
Also see: Chicago Fed’s Goolsbee suggests central bank is almost done raising rates
In a speech to the Dallas Business Club at Southern Methodist University, Logan said another skip “could be appropriate.”
“But skipping does not imply stopping,” she added.
The Dallas Fed president noted that some measures of inflation remain fairly high. The inflation measure favored by the Dallas Fed that takes out the biggest movers of inflation in a month was running at a 2.8% rate over the past three months.
“These numbers indicate it is too soon to confidently say inflation will trend to 2% in a timely way,” Logan said.
The 10-year Treasury yield
BX:TMUBMUSD10Y
slipped to 4.25% in Thursday trading.
More: Fed’s Williams says monetary policy is in a ‘good place,’ recession talk ‘has vanished’
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