Fed's Logan Says Modestly Restrictive Policy Still Appropriate

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00:00On the good side, I think tariffs are having an effect in keeping that elevated, but should

00:06dissipate over time. On the housing services side, I do expect some further cooling there.

00:13But what really struck me in that piece was that the core services X housing is elevated,

00:20and it's been pretty persistently elevated. And I'm not really convinced that we're seeing signs

00:26that it is coming back to two. Now, the combination matters a lot. So that doesn't have to go all the

00:31way back to two to get PCE to two. But it does need to move in a direction toward two to get us

00:40in that combination. And so that's what one of the things I'm really focused on is this underlying

00:44inflation and the persistence of it. And until I see convincing evidence that we are headed all the

00:53way back to our 2% target, I really do think modestly restrictive policy is appropriate

00:59in balancing our dual mandate objective. We are seeing some cooling, and I see that in the

01:05unemployment rate, which has ticked up a little bit over the course of the year. But it's ticked up

01:10fairly slowly representing a gradual cooling and a gradual cooling that seems appropriate to me

01:16in order to get inflation back to our 2% to our 2% target. So, you know, it is a labor market that's

01:25cooling. It is one that we can collect a lot of data about a data about. It's one that in making

01:33the decision to cut rates in September, we took some preemptive insurance against those declines of

01:39being even larger. But it does not seem like a labor market to me that would see that it would be

01:46appropriate for further preemptive insurance. I think the risks that are there on the labor market

01:50are ones we can continue to monitor. And if we saw more than gradual cooling, then I would think it

01:57would be, you know, appropriate to consider another rate cut.