Fed Governor Logan: The U.S. Federal Reserve needs at least two more interest rate hikes, totaling 50 basis points.

Dallas Federal Reserve President Logan said Friday that under the current economic outlook, the U.S. Federal Reserve needs at least two more 25-basis-point interest rate hikes, totaling 50 basis points in policy rate increases, before pausing to assess economic and financial conditions for its next steps. This week, Logan was part of the Fed’s 10-2 voting majority, supporting keeping the federal funds target rate range at 3.75%–4.00%. She noted that current inflation still requires further curbing, with the policy rate needing to rise by at least another 50 basis points to sufficiently constrain the economy and push inflation back to the 2% target. Logan pointed out that tech investment prospects and geopolitical tensions are driving financial market volatility; in this context, gradual policy adjustments help households, businesses, and market participants adapt to higher interest rates, reducing the risk of unnecessary sharp deterioration in economic activity. She also emphasized that the Fed should clearly communicate its policy goals — a stance that differs from Fed Chair Walsh’s view that such policy guidance should only be provided during crisis periods. Logan added that the current financial environment still supports economic growth, and the rise in long-term borrowing costs mainly reflects investors’ expectations of economic expansion and higher interest rates, rather than a separate factor weighing on the economy. Even if the Fed skips a rate hike at a single meeting, it will not alter its ultimate policy target; as long as the market understands the Fed’s policy plan, the specific timing of rate hikes has a limited impact on long-term interest rates paid by borrowers.