Fed’s Logan: It’s much too soon to think about cutting interest rates

These are certainly not dovish comments.

• Believes it is “much too soon” to think about cuts
• Need to see more of the uncertainty resolved about which economic path we’re on
• FOMC should remain prepared to respond appropriately if inflation stops falling
• Increasingly concerned about upside risks to inflation
• Believe it will soon be appropriate for Fed to decide when to slow — not stop — balance sheet runoff
• Not ready to put higher trend productivity in my forecast

The Dallas Fed has always been a home for hawks so this isn’t a shock but these are probably the starkest comments this year. The comment about ‘responding appropriately’ isn’t entirely clear but that sounds like hikes, which isn’t something anyone has been talking about.

The US dollar hasn’t moved much on these comments but there was some minor selling in 2-year notes, boosting yields 1 to 1.5 bps.