Federal Reserve's Logan: Should not rule out the possibility of raising interest rates again

On January 7th, Federal Reserve's Logan warned that the Fed may need to resume raising short-term policy rates to prevent a resurgence of inflation caused by the recent decline in long-term bond yields. "If we do not maintain sufficiently tight financial conditions, we face the risk of inflation rebounding and reversing the progress we have made," said Logan. "Restrictive financial conditions play an important role in keeping demand and supply consistent and maintaining stable inflation expectations," she said, noting that the inflation rate is close to the Fed's target of 2% and although the labor market remains tight, it is gradually rebalancing. "If we do not maintain sufficiently strict financial conditions, we cannot expect price stability."