(Bloomberg) — Federal Reserve Bank of Dallas President Lorie Logan said high interest rates may not be restraining the economy as much as policymakers anticipate, emphasizing it’s important for officials to keep options open for future adjustments.
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It could be that “policy is just not as restrictive as we think that it might be,” Logan said Thursday at an event in El Paso, Texas.
Fed officials have held their benchmark rate in a target range of 5.25% to 5.5% since July 2023, and inflation remains above their 2% target, leading some economists to question how severely policy is weighing on price pressures.
Logan also said the so-called neutral interest rate — the level of rates that neither stimulates nor weighs on the economy — has probably risen, adding to a broader debate on the topic.
By contrast, New York Fed President John Williams said he sees “ample evidence” that policy is restrictive, and indicated he doesn’t believe the neutral rate has risen.
Read More: Fed’s Williams Sees ‘Ample Evidence’ That Policy Is Restrictive
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