DALLAS, October 31, 2025 – Dallas Federal Reserve Bank President Lorie Logan stated on Friday that the U.S. central bank’s recent interest rate cut was unnecessary and expressed opposition to any additional cuts in December. Speaking at a Dallas Fed banking conference, Logan cited a “balanced” labor market that requires no immediate stimulus and inflation that is likely to remain above the Fed’s 2% target for the foreseeable future.

---

Logan Criticizes Recent Fed Rate Cut

Logan remarked in prepared comments, “This economic outlook didn’t call for cutting rates. I did not see a need to cut rates this week. And I’d find it difficult to cut rates again in December unless there is clear evidence that inflation will fall faster than expected or that the labor market will cool more rapidly.”

Her remarks came in the wake of the Federal Reserve’s decision on Wednesday to lower its policy rate for the second time this year by 25 basis points, bringing the target range to 3.75%-4.00%. Fed Chair Jerome Powell said the move aimed to prevent the labor market from slowing too abruptly, while emphasizing that another cut in December is not guaranteed, particularly given ongoing gaps in official economic data caused by the federal government shutdown.

---

Economic Outlook: Labor Market and Consumer Trends

Although Logan does not have a voting seat on the Fed’s policy-setting committee this year, she said private-sector data, state-level unemployment claims, and insights from the Fed’s network of business and community contacts give her confidence that the economy is relatively stable.

• Consumer spending has slowed but remains above the long-term trend.
• Stock-market gains are boosting demand from wealthier households.
• Large companies continue investing heavily in artificial intelligence and data centers.
• Lower-income households and smaller companies face challenges but remain stable.

Logan noted that labor market risks are predominantly to the downside, including potential layoffs, stock market volatility, and the ongoing government shutdown, but emphasized these are monitorable risks that do not currently require preemptive action.

---

Inflation Concerns Remain

Logan stressed that while inflation is not at crisis levels, it remains too high and slow to return to the Fed’s 2% goal. “Our obligation to the public is to deliver on this commitment,” she said, reinforcing the Fed’s ongoing mandate to maintain price stability.

---

Support for Balance Sheet Pause and Repo Rate Targeting

Logan expressed support for the Fed’s decision to pause shrinking its balance sheet, noting that elevated money market rates indicate the balance sheet is near normal levels. She added that if overnight repo rates for Treasuries remain elevated, the Fed may need to restart asset purchases to ensure sufficient bank reserves.

Additionally, Logan reiterated her view that the federal funds rate is an outdated policy tool, and the Fed should transition to targeting a repo rate, such as the tri-party general collateral rate, for better control over short-term money markets.

---

Key Takeaways

• Dallas Fed President Lorie Logan opposes the recent 25 basis point rate cut and cautions against a December reduction.
• The U.S. labor market is balanced, and inflation is expected to stay above the Fed’s 2% target.
• Consumer spending, corporate investments, and wealthier households’ demand are sustaining economic growth, while downside risks remain manageable.
• Logan supports halting balance sheet shrinkage and advocates shifting from the federal funds rate to a repo rate target.
• Future policy moves depend on inflation trends and labor market developments, with preemptive cuts unlikely unless conditions worsen significantly.