Dallas Fed chief Logan urges modest rate increase

A top Federal Reserve official called for higher interest rates on Thursday, July 16, arguing that recent signs of cooling inflation are insufficient to declare victory in the central bank's long-running battle against high prices. Dallas Fed President Lorie Logan, a voting member of the rate-setting Federal Open Market Committee (FOMC), said she believes "modestly higher interest rates" are needed to better balance the Fed's dual mandate of price stability and maximum employment.

Logan made her case in a speech in Houston, becoming the first of Fed Chair Kevin Warsh's colleagues to publicly advocate for a rate hike ahead of the FOMC's next scheduled meeting on July 28-29. She stressed that inflation has remained above the Fed's 2% target for over five years, compounding strain on household budgets. "One month of relief is not enough," Logan said. "It is time to finish the job of restoring price stability."

Her comments stand in contrast to a more optimistic view from other officials, including New York Fed President John Williams, who has pointed to multiple signs that inflation has peaked. Williams has said he expects overall inflation to decrease to around 3.25% by the end of...