Fed's Logan Says Rates Should Rise to Fight Inflation

By Matt Grossman

Dallas Fed President Lorie Logan said she believes the Federal Reserve should raise interest rates to combat elevated inflation, suggesting she could be prepared to dissent against any decision to hold rates steady later this month.

Speaking in Houston on Thursday, Logan said the June inflation figures released Tuesday showed progress toward cooler price increases but weren't enough to reassure her that inflation is on a path back to the Fed's 2% goal.

"The June CPI data do suggest the possibility of a more hopeful scenario where inflation returns all the way to target," Logan said, according to a published text of her remarks. "Still, that path is tenuous."

The Fed has held rates steady this year at 3.5% to 3.75%, including at Chairman Kevin Warsh's first meeting as the central bank's new leader in mid-June. Over the past six months, however, the labor market has strengthened and price increases have mostly accelerated.

Some inflationary pressure has come from higher energy prices following the U.S. and Israeli strikes on Iran in February. Renewed fighting there this week could add further pressure, Logan said. Other factors--including the surge in artificial-intelligence investment and a strong consumer economy--are also driving or enabling inflation, she noted.

"I currently believe modestly higher interest rates would better balance the outlook and risks," Logan said.

In congressional testimony this week, Warsh committed to reining in inflation but didn't discuss how the Fed will move at its upcoming meetings. The cooler-than-expected inflation numbers published this week will likely bolster the thinking of other Fed officials who prefer to wait for more data before raising interest rates for the first time in three years.

The June inflation report led traders to slash their bets on a potential July rate hike. The likelihood implied by pricing in interest-rate futures markets now stands at just 12%.

In a speech Wednesday, New York Fed President John Williams--who, along with Logan, is one of five regional reserve-bank presidents with a 2026 policy vote--said rates are "well-positioned" at the current level.

Also on Wednesday, Fed governor Lisa Cook said she supported a wait-and-see posture for now.

"I see it as prudent to give a bit more time to observe how inflation unfolds from here," she said.

Write to Matt Gossman at matt.grossman@wsj.com

(END) Dow Jones Newswires

July 16, 2026 13:29 ET (17:29 GMT)