Fed Chairman Logan still sees no reason to stop raising interest rates…

Bloomberg — Dallas Federal Reserve Chairman Lori Logan said the issue of the pause in interest rate hikes at the June central bank meeting remains unclear.

“After raising the target range for the fed funds rate at each of the last 10 meetings of the Federal Open Market Committee (FOMC), we have made some progress.”Logan said Thursday in a speech prepared for the Texas Association of Bankers conference in San Antonio. “The data of the next few weeks may show that it is appropriate to skip the meeting. But as of today, we are not yet at that point.”

Logan, who this year votes on the Federal Open Market Committee to set interest rate policy, said he had an open mind ahead of the June 13-14 meeting, but expressed disappointment about the lack of progress on inflation. Prices, especially with the exception of the volatile food and energy categories, haven’t fallen fast enough, and a still-tight labor market continues to put pressure on wages.

Traders raised their bets on a June rate hike to around 40% after the comments.

On the other hand, his colleague Philip Jefferson, speaking in Washington Thursday morning, indicated that he is willing to be patient to see the extreme interest rate hikes of this tightening cycle seep into the economy. He cited the late effects of policy and the uncertainty surrounding tightening lending rules.

“History shows that monetary policy operates with long and variable delays, and that a year is not long enough for demand to feel the full impact of higher interest rates.”Jefferson testified before the National Association of Insurance Commissioners in Washington.

He has been nominated by Chairman Joe Biden for the vice chair position of the Fed and is awaiting Senate confirmation.

The Federal Reserve has raised interest rates dramatically, including four increases of 75 basis points, which have raised the cost of borrowing by 5 percentage points in just over a year.

Chairman Jerome Powell and some other policymakers have indicated that depending on what the data shows in the intersessional period, it may be wise to pause the rallies at next month’s meeting.. Powell will speak at a Federal Reserve conference in Washington on Friday.

Some officials argue that the decline in bank lending, which has intensified after the collapse of many institutions in recent months, is amplifying the weight of financial conditions, and may be doing part of the Fed’s job for it.

But Logan said the tightening of credit conditions is not a surprise and that trend has continued since the end of last year.

“So far they say the main reason for the recent tightening is monetary tightening, not pressure on the banking system,” Logan said.

Earlier this week, the Dallas Fed chairwoman said she favored a slowdown by the Fed, but also noted that the pause would not prevent further rate hikes at later meetings if needed.

Read more at Bloomberg.com