Federal Reserve Bank of Dallas President Lorie Logan told an audience at Columbia University that current monetary policy is appropriately positioned to confront economic risks, while stressing continued concern about whether inflation will return to the central bank's 2% goal.
Logan described a cautiously optimistic view on inflation’s trajectory but stopped short of declaring full confidence that the economy is on a definitive path back to 2% inflation. She noted that tariffs remain a factor filtering through the economy, and that their effects are still being felt.
The Dallas Fed president pointed to a recent Supreme Court decision on tariffs as a source of new uncertainty for the outlook on import taxes. In that context, she said upside inflation risks continue to exist in the economy.
Logan also highlighted broader uncertainty in the economic picture, identifying the technology sector as one of the larger unknowns. She raised the prospect that demand could, in some areas, outpace supply - a dynamic that could sustain inflationary pressure.
On monetary policy, Logan said she supported the Federal Reserve’s January decision to keep interest rates unchanged, characterizing that choice as appropriate amid a stabilizing labor market.
Addressing the labor market directly, Logan indicated that, at present, artificial intelligence does not appear to be displacing workers.
Turning to financial-sector concerns, she emphasized the importance of banks considering the diversity of their deposit bases and ensuring they can access liquidity when necessary. That, she suggested, is a key preparedness issue for the banking sector.
Contextual note - Logan’s remarks combined guarded optimism about recent developments with recognition of several clear sources of uncertainty: tariff-related developments, persistent upside inflation risks, structural questions in the technology sector, the potential for demand to outstrip supply, and operational risks for banks tied to depositor composition and liquidity access.