Fed's Logan Backs Two More Rate Hikes, Raising Prospect of Faster Winter Tightening

Dallas Fed President Lorie Logan stated the Federal Reserve clearly needs at least two more 25-basis-point interest rate hikes, suggesting policy could tighten more rapidly this winter before pausing. Logan argued the current federal funds rate of 3.75% to 4.00% is at least 50 basis points below a modestly restrictive stance, leaving monetary policy overly accommodative. Supporting her hawkish view, September Core PCE inflation stood at 3.1% alongside a hotter-than-expected October CPI report. Following hawkish remarks from Logan and Governor Christopher Waller, markets repriced rate expectations, pushing two-year US Treasury yields up 20 basis points to 4.75%.