EL PASO, Texas (Reuters) -Dallas Federal Reserve Bank President Lorie Logan said on Thursday she believes inflation is still heading to the Fed’s 2% target, although she can imagine “other paths” that the Fed ought to be prepared for, and it is too early to consider cutting interest rates.
“I think there’s good reasons to think that we’re headed to 2% – we’re still on that path, perhaps a bit slower and a little bit bumpier than maybe many thought at the beginning of the year,” Logan said at an event in El Paso, Texas.
“But there’s a lot of uncertainty about that path. And I can imagine other paths that we need to be prepared for. And I continue to be concerned with upside risks around inflation.”
Fed policymakers meet in about two weeks and are expected to keep the policy rate in its current 5.25%-5.5% range. Many analysts also expect Fed officials to project fewer rate cuts this year than the three estimated a couple of months ago.
“It’s really important that we don’t lock into any particular path for monetary policy,” Logan said. “I think it’s too soon to really be thinking about rate cuts. And I think it’s really important that we keep all options on the table and that we continue to be flexible so that we can watch the data as it as it comes in and we can watch how financial conditions evolve and respond to the totality of the data.”
(Reporting by Ann Saphir; Editing by Leslie Adler and Richard Chang)