Dallas Fed President Lorie Logan expressed cautious optimism that current monetary policy will achieve the 2% inflation target without harming the labor market. Speaking in Austin, she indicated the existing policy stance is appropriate and no further cuts are needed if data confirms the expected trajectory. Her comments reflect a shift from earlier concerns about labor market deterioration.

Logan, who voted with the majority to hold rates at 3.50%-3.75% in January, noted that downside risks to employment have dissipated following last year's reductions. However, she emphasized that those cuts also heightened inflation risks. With borrowing costs now near estimates of neutral, the economy has rebounded strongly while inflation remains stubbornly above target for nearly five years.

The Dallas Fed official listed several inflation worries, including upcoming tariffs, expansionary fiscal policy, and buoyant financial conditions. While expecting progress on housing and services inflation, Logan stated that cutting rates again could only become appropriate if inflation falls *and* the labor market cools significantly. Her stance implies rates will hold until clear evidence of a broad-based disinflationary trend emerges.