• Premature easing of financial conditions could allow demand to pick back up
• If we don’t maintain sufficiently tight conditions, there is a risk inflation will pick back up, reversing progress
• Appropriate to consider parameters to guide decision to slow Fed’s balance sheet runoff
• Labor market ’still tight‘ but continues to rebalance
• Financial system overall has ‚more than ample‘ bank reserves and liquidity, though no longer ’super abundant‘
• Inflation in a ‚much better place‘ than last January but Fed’s job is not yet complete
• We should slow the pace of asset runoff as the Fed’s overnight reverse repurchase balances approach a low level

The Fed’s repo balances should approach a low level around mid-year so we should start to hear more talk about slowing the pace of runoff soon, though I don’t think it will be much of a factor for markets (though others disagree).

Overall, Logan doesn’t sound like someone who is even close to supporting a rate cut.

This article was written by Adam Button at www.forexlive.com.