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Logan’s concerns put pressure on markets and shift expectations
Dallas Fed President Lorie Logan made it clear on November 18 that she is not convinced another rate cut should happen in December. She explained that inflation is still too high and that the job market is cooling slowly, not sharply enough to justify more easing. Her comments lowered the market’s confidence in a December cut, bringing the odds down to about 50 percent.
Logan pointed to several issues behind her caution. Inflation climbed to 3.0 percent in September, and core inflation remains firm with housing and services keeping pressure on prices. She also noted that while the economy is slowing, it is not weakening fast enough to require additional support. Current estimates show full-year growth around 1.8 percent, with the recent government shutdown adding new hurdles that could cut billions from GDP.
The labor market remains steady with 4.3 percent unemployment and about 150,000 new jobs added in October. Logan believes this gradual cooling does not call for another preemptive rate cut.
Her comments align with other Fed officials who prefer to pause after the recent cuts in September and October. Concerns over long-term inflation risks are growing, and several policymakers want clearer proof that price pressures are easing before moving forward.
Markets reacted quickly. Treasury yields inched higher, and traders pulled back on earlier expectations for a December cut. Investors are now waiting for new data that could settle the debate, including the next inflation report and delayed GDP figures.
For borrowers and businesses, this means higher rates could continue into 2026. The Fed is trying to avoid easing too soon while also preventing the economy from slowing too sharply. For now, Logan’s message has added a layer of uncertainty, leaving the December meeting dependent on upcoming numbers.
