Fed's Logan 'Cautiously Optimistic' on Current Rate Policy

Dallas Fed President says data in coming months will show if current policy is appropriate

Published on Feb. 10, 2026

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Dallas Federal Reserve President Lorie Logan said she is "cautiously optimistic" that the Fed's current policy rate setting will get inflation back to the 2% goal while keeping the job market stable. She said economic data in the coming months will show if that hope bears out, and that if inflation falls but the labor market cools materially, cutting rates again could become appropriate.

Why it matters

The Federal Reserve's monetary policy decisions have a significant impact on the broader economy, influencing factors like inflation, employment, and financial markets. Logan's comments provide insight into the Fed's current thinking and the factors they are weighing as they aim to achieve their dual mandate of price stability and maximum employment.

The details

Logan, who voted in the 10-2 majority at the Fed's January meeting to hold the policy rate in its current 3.50%-3.75% range, said she feels that after last year's three interest-rate cuts, downside risks to the labor market "appear to have meaningfully dissipated." However, she said the rate cuts also created additional risk on inflation. With short-term borrowing costs now in the range of estimates for a "neutral" policy setting, Logan said they are doing little to restrain an economy that has rebounded strongly and inflation that has run above the Fed's 2% target for nearly five years.

  • Logan made these remarks on Tuesday, February 10, 2026.

The players

Lorie Logan

The president of the Dallas Federal Reserve.

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What they’re saying

“If so, this would tell me that our current policy stance is appropriate and no further rate cuts are needed to achieve our dual mandate goals.”

— Lorie Logan, Dallas Federal Reserve President (marketscreener.com)

“But right now, I am more worried about inflation remaining stubbornly high.”

— Lorie Logan, Dallas Federal Reserve President (marketscreener.com)

What’s next

The Federal Reserve will continue to monitor economic data in the coming months to assess whether the current policy rate setting is appropriate to achieve its goals of price stability and maximum employment.

The takeaway

The Federal Reserve is walking a fine line, trying to bring down inflation without causing significant damage to the labor market. Logan's cautious optimism suggests the central bank believes its current policy approach can achieve this delicate balance, but the data in the months ahead will be crucial in determining if further adjustments are needed.