Statement from Dallas Fed President Lorie Logan on FOMC dissent

Inflation does not appear to be on course to sustainably achieve the Federal Open Market Committee’s 2 percent target. More than five years after the post-pandemic surge, prices have continued to rise too rapidly. Every month of above-target inflation compounds the strain on the budgets of American families and businesses.

Even after accounting for productivity gains and temporary supply shocks, inflation appears to be trending toward the mid-2’s, not all the way to 2 percent, and the risks are to the upside. In addition to its inflation target, the FOMC has a mandate to achieve maximum employment; the job market is solid and perhaps strengthening a bit.

Labor, consumption and financial market conditions indicate that monetary policy is not restraining the economy. Without any policy restraint, inflation will likely continue to trend above target until there’s an unanticipated shock. The FOMC cannot count on unanticipated shocks to achieve its goals and can always adjust policy if unanticipated shocks occur. Modest action in the near term would reduce the likelihood of needing to take sharper action later.

The FOMC’s policy framework, as described in the statement on longer-run goals and monetary policy strategy, also calls for a balanced approach to our Congressionally established price stability and maximum employment mandates. To better balance the outlook and risks for the Fed’s dual mandate goals, I would have preferred to increase interest rates by one-quarter percentage point at this week’s meeting.