Dallas Fed President calls for two additional rate hikes

Dallas Federal Reserve Bank President Lori Logan called for raising US interest rates at least two additional times, by 25 basis points each, warning that continued inflation above target could make rising prices an established part of the economy's behavior.

Lori Logan said, in remarks prepared for her delivery during an energy conference organized by the Federal Reserve Banks in Dallas and Kansas City, on Tuesday, that the US central bank needs to implement at least two additional increases in interest rates, adding that excessive inflation is “unacceptable.”

She indicated that the pace of future increases will depend on economic and financial developments in the near term, but pointed out that the Federal Reserve may be able to move at a faster pace during the winter compared to the pace it followed in the fall.

Her statements come after core consumer prices, excluding food and energy, rose by 0.3 percent during October, a pace equivalent to annual inflation exceeding 4 percent if it continues, while the Federal Reserve targets inflation at 2 percent according to the personal consumption expenditures index.

Lori Logan said that inflationary pressures are not limited to energy supply disruptions related to war or tariffs, but rather include broader trends that may persist even after recent shocks subside.

The Federal Reserve had raised interest rates by a quarter of a percentage point in September, before stabilizing them in October, a decision supported by Lori Logan at the time, preferring gradual monetary tightening to reduce the risk of slowing economic activity too much.

The US Central Bank is scheduled to hold its next monetary policy meeting on December 8-9.