Logan Says Fed Needs Two More Rate Hikes

Dallas Federal Reserve President Lorie Logan said the Federal Open Market Committee needs at least two more quarter-point interest-rate increases and could raise rates faster this winter, as October inflation remained above expectations.

In prepared remarks Tuesday at an energy conference in Houston, Logan said the pace would depend on economic and financial conditions. She supported the Fed’s decision to hold rates steady in October, after a quarter-point increase in September, and said gradual moves can reduce the risk of slowing economic activity more than necessary.

Logan said that after two further increases, it would make sense for policymakers to pause and assess conditions before deciding on the next step. Her remarks express her policy view; they do not commit the Federal Open Market Committee, which will make its next rate decision at its December 8-9 meeting.

The Bureau of Labor Statistics reported that the consumer price index rose 0.4% in October from the previous month. The index excluding food and energy increased 0.3%. Logan said the higher-than-expected CPI reading raised concern that personal consumption expenditures inflation could also rise. The Fed’s...