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Dallas Fed taps U.S. central bank markets expert Logan as new chief -Breaking


© Reuters. Lorie K., newly elected president and chief executive of the Federal Reserve Bank of Dallas, appears in this undated image from handout, which was obtained May 11, 2022. Dallas Fed/Handout via REUTERS

(Reuters] – Lorie L. Logan was elected the Dallas Federal Reserve president on Wednesday. He fills the vacancy created by Robert Kaplan’s resignation last Fall. It follows outcry regarding the ethics of Kaplan’s active stock trading in the Coronavirus pandemic.

Logan is an executive vice president of the New York Fed, and will begin her new position on August 22, according to a Dallas Fed statement.

To combat inflation at an unprecedented rate, the U.S. central banking is in its most aggressive policy tightening since decades. According to data released Wednesday, consumer prices rose by 8.3% annually in April.

Logan (49) will participate with the other 11 Fed bank presidents as well as the Washington Fed Board of Governors, in setting the monetary policy that affects the world’s largest economy. On Sept. 20-21, her first meeting of policy will take place.

Logan, a top official at the New York Fed’s Markets Division since 2012, currently manages the $9 trillion portfolio that includes securities, cash and assets.

As the Fed attempted to alleviate financial conditions and strengthen the economy during the Pandemic, these holdings almost doubled. Logan now says that the Fed plans to cut those assets beginning next month in its attempt to slow U.S. growth and increase borrowing costs.

Jerome Powell, Fed Chair, stated in the statement that Lorie was a respected colleague and dedicated public servant. His remarkable skills and experience dealing with complex financial markets informed our decisions. This has helped us implement monetary policies to support the U.S. Economy.

Powell has signaled that he and fellow policymakers will likely follow last week’s half-percentage-point interest rate hike with at least two more hikes of the same size at upcoming policy meetings.

To slow down household demand for goods, services, and workers’ demand fast enough to reduce wage and price pressures and to bring inflation below the Fed’s target of 2% is the goal of rising borrowing costs.

Fed policymakers are hopeful that it can be done, without weakening the strong labor market and sending the economy into prolonged decline.

Logan has a unique perspective as a Fed insider. He is also a market expert. Logan’s departure marks a significant change from two previous Dallas Fed presidents who were both from countries outside of the U.S. central banking system.