Dallas Fed President Lorie Logan on Tariffs, Inflation, and Unemployment

Fed Officials on Inflation and Tariffs

• 🎯 Kansas City Fed President Schmidt is focused on the outlook for inflation, hesitant to view tariffs as one-time price increases.
• ⚠️ He is concerned that rising prices could increase inflation expectations, making inflation harder to control.
• ⚡ Lori Logan states that higher tariffs would boost unemployment and inflation.
• 📈 The Fed should prevent tariff-related price increases from becoming more persistent, maintaining its inflation-fighting credibility.

Economic Outlook and Recession Risks

• 📉 While downside risks have reduced, they have not disappeared.
• 📊 Goldman Sachs lowered its recession odds from 65% to 45%, and Moody's from 75% to 60%.
• ⚠️ Morgan Stanley notes that the Fed's pause lowers immediate downside risk but prolongs uncertainty.
• 🏙️ City economists believe pausing reciprocal tariffs (excluding China) does not mean the US economy has avoided a slowdown in growth.

Persistent High Tariffs

• 📈 The US has seen a significant increase in tariff rates, with current rates estimated between 20-27%.
• 📉 Economists continue to forecast lower growth and higher inflation due to these tariffs.