Fed's Logan says a rate hike may be needed this year

Dallas Federal Reserve President Lorie Logan stated on June 3 that a rate hike might be necessary in the second half of this year to bring inflation down to the 2% target. Logan assessed the U.S. labor market as largely balanced, noted active investment in artificial intelligence (AI), and described financial conditions as still accommodative. However, she pointed out that the current inflation trend is not slowing toward the Fed's 2% goal. This situation, she said, suggests that current monetary policy is not having a restrictive effect on the economy. Logan added that there is growing concern that a rate hike may be needed in the second half of this year to fully restore price stability and properly fulfill the Fed's dual mandate.