Feds Logan
Dallas Fed President Logan is expected to speak later but the text of her speech is being leaked out. CNBC is reporting:
- Data at this time does not support skipping a rate hike at the next meeting in June
- Data incoming weeks could yet show that it is appropriate to skip a meeting
- As of today, we are not there yet
- The Fed still has work to do in achieving its goal of price stability
- It is a long way from here to 2% inflation
- She pointed out that the core PCE price index ran a 4.9% annualized pace in the 1st quarter. That was higher than the 4.4 pace in the 4th quarter of 2022
- Keeping an open mind ahead of the meeting
- She is concerned about whether inflation is falling fast enough
- Says Fed has not made enough progress toward 2% target
- Inflation is much too hard
- Restoring price stability is critical priority
- Labor market has called economy which is less out of bounds
- Recognizes arguments against tightening policy too much or too fast
- Effect of banking stress affects so far is comparable to a 25 – 50 basis point Fed policy rate increase
- Every bank in the US it should be fully set up at Fed’s discount window and run regular tests
Logan is a voting member of the Fed this year. The market is pricing in a 26% of a 25 basis point hike at the June meeting. The Fed has so far raised rates by 500 basis points (5%)
Th US stocks have turned into negative territory with the Dow futures now implying a decline of -110. The NASDAQ is down -1 point and the S&P is down -8 points.
In the US debt market:
- 2 years is now up 7.7 basis points at 4.234%. That is testing the 100-day moving average at 4.245%
- 10-year yield is at 3.626%. Its yield is moving above its 100-hour moving average at 3.592% and its 200-day moving average of 3.61%