MNI: Fed Framework Should Fit Higher Rate Environment - Logan

The Federal Reserve's policymaking framework should move away from its 2020 focus on a low-rates, low-inflation environment and strategies created to deal with that, Dallas Fed President Lorie Logan said Tuesday. 

"We are now in a higher-rate environment, and the postpandemic experience provides ample evidence of the potential for inflation to surge far above target," she said. "It seems more appropriate to me to focus on achieving our inflation target going forward, rather than trying to make up for past shortfalls of inflation. In the labor market, I am inclined to pay more attention to increases of employment above the maximum sustainable level, not just shortfalls from that level." 

The FOMC should also better convey key risks and uncertainties and how monetary policy would respond to them in its communications, she said in opening remarks for a Fed Listens event in El Paso, Texas. The Fed is set to conclude a review of its framework by late summer. (See: MNI: Fed To Examine If Framework Robust To Any Scenario)