The odds of a rate cut by the Federal Reserve in December have decreased once again after Dallas Federal President Robert Logan expressed a hawkish stance on inflation during a speech on Friday. According to Logan, the central bank has an obligation to deliver 2% inflation and therefore, he did not see a need to cut rates this week. While he acknowledged that there are risks to the labor market, he believes that these can be addressed promptly if needed.

Logan’s remarks come as a surprise after recent speculation that the Fed might consider cutting rates again in December to support the economy. However, Logan’s stance suggests that the central bank may not take such action anytime soon. This is particularly true given that inflation is not convincingly headed towards the 2% target, as Logan noted during his speech.

In his speech, Logan emphasized that the Fed has an obligation to deliver 2% inflation and that it will take time for inflation to fall faster than expected. He also highlighted that the risks to the labor market are mainly to the downside, but the central bank can address these promptly if needed.

Logan’s comments have led to a decrease in the rate cut odds for December, with some analysts predicting that the Fed may keep interest rates unchanged for the time being. This is a shift from previous expectations of a possible rate cut in December, which were fueled by concerns about the economy and inflation.

Overall, Logan’s hawkish stance on inflation suggests that the Fed may take a more cautious approach to monetary policy in the near term. While this could be seen as a positive development for the economy, it also highlights the challenges facing the central bank in navigating the complexities of inflation and labor market dynamics. As always, close monitoring of economic data and Fed communications will be crucial in determining the next steps for monetary policy.