Fed's Logan hints at possible end of US hikes?

3:27 PM 9 October 2023
  • The labor market is not as strong as it was a year ago.
  • It's still too early to talk about a rate-cutting strategy.
  • High inflation is the biggest threat, and everything must be done to prevent a return of inflation.
  • It's too early to talk about inflation heading toward the target.
  • If long-term rates are higher due to higher term premiums, there may be no need for further rate hikes.
  • The Fed must still consider current financial conditions, which have tightened significantly in recent months.
  • Higher yields may mean no need for rate hikes.
  • If the rise in long-term rates is associated with a strong economy, the Fed may be compelled to do more.

Interesting words from Logan at the Fed. The head of the Dallas Fed sees a chance to end rate hikes, considering the current significant increase in risk premiums, which may result from high interest rates. In her view, the recent rise in yields also tightens financial conditions, potentially making further hikes unnecessary.

TNOTE is rebounding, although at the same time it is important to remember that much of the increase is simply demand for safe havens. Source: xStation5

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