Logan, Musalem and Barkin say the Fed must keep raising rates, with Logan seeing at least two more quarter-point hikes

Dallas Fed President Lorie Logan said at least two more 25-basis-point rate increases are needed given the current economic outlook^1,2. She added that the pace of those increases can be gradual³.

St. Louis Fed President Alberto Musalem said additional firming of monetary policy will be necessary, and soon⁵. He said further interest-rate increases are needed to bring inflation back to the central bank’s goal⁸, and that the Fed will need to raise rates “again soon”¹⁴. In remarks reported on Friday, he described inflation as too high and broad-based and said the Fed needs to act “soon”¹¹. He said higher rates will be needed in the near future to rein in inflation¹⁵.

Richmond Fed President Tom Barkin indicated backing for “gradual” rate increases⁴. He said the central bank’s direction is “straightforward” and that the open question is pace¹³.

Why it matters to investors

The comments put three Federal Reserve officials on record in favour of raising interest rates further^6,11. Taken together, they signal that a December rate increase remains on track⁷.

The remarks follow the Fed’s decision to hold rates this week, at which Governor Lisa Cook and Cleveland Fed President Beth Hammack dissented in favour of a quarter-point increase¹⁰. The officials speaking on Friday did not dispute the direction of policy; the debate they described is about the size and timing of further moves^11,13.

Musalem also said he is not concerned by the recent tightening of financial conditions⁹, a signal that a weaker stock market alone may not slow the Fed’s plans. He said the short-run economic costs of acting should be weighed against the risks of waiting¹², an argument for moving sooner rather than later.

What to watch

The split between Logan and Barkin’s emphasis on a gradual pace^3,4 and Musalem’s call to act soon⁵ frames the debate heading into the December meeting. Musalem is not a voter on policy this year⁷, so the views of voting members will carry more direct weight in that decision.

Logan’s call for at least two more quarter-point moves² sets a benchmark for how far some officials believe rates still need to rise. Markets will test that guidance against incoming inflation data, which Musalem described as too high and broad-based¹¹.

For now, the message from the three presidents is consistent on direction. Rates need to be higher, and the question is how much¹¹.