Inflation has been stuck above the Fed's 2% target for a while now.
Logan stressed that a solitary month of improving figures does not constitute a lasting shift. June's consumer inflation reading finally cooled off, thanks mostly to lower gas prices, but Logan is not convinced the trend will stick.
"One month of relief is not enough. It is time to finish the job of restoring price stability," she said.
Her point is that inflation is not falling back to 2% on its own. Without some extra pressure from higher rates, it might stay too hot for comfort. Logan described the path to lower inflation as "tenuous" - it depends on avoiding more energy shocks and on making sure demand does not get too strong. "For now, it is more a hope than a likelihood," she added.
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Logan is not calling for a huge rate hike. She said "modestly higher" rates would do the trick. But even a small increase would be a shift after the Fed has kept rates steady all year so far.
Logan is not the only one worried. Jeff Schmid, president of the Kansas City Fed, echoed similar concerns.
"My primary concern is inflation, which is too hot and has been above target for too long," Schmid said. "As such, my focus remains on inflation in setting the correct course for policy."
Not everyone on the Fed is leaning that way. Chairman Kevin Warsh did not signal anything about future rates during recent comments. But he did push back on the idea that rising AI investments will fuel inflation - a topic Logan also addressed.
Logan acknowledged that AI and other technologies could eventually boost productivity and help the economy produce more. The catch is timing. "The demand effects are here already," she said. "And when demand outstrips supply, the result is higher prices." So even if AI helps down the road, it is adding to price pressure right now.
The Fed's next policy meeting runs July 28-29, and financial markets currently expect no change in rates. However, Logan's comments and the division among policymakers suggest that the debate over tightening remains active. The central bank has held its benchmark rate steady through the first half of the year, awaiting clearer signs that inflation is durably retreating.
Logan's call for a "modestly higher" rate reflects a belief that the final leg of the inflation fight requires a nudge, not a jolt. Investors will watch closely for any shift in tone from Chairman Warsh or other officials in the weeks ahead.
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