Dallas Fed hires U.S. central bank markets expert as new chief

Lorie K. Logan, the new president and CEO of the Federal Reserve Bank of Dallas, is pictured in this undated image, obtained May 11, 2022. Dallas Fed/Handout via REUTERS

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May 11 (Reuters) – The Dallas Federal Reserve on Wednesday named Lorie Logan as its next chairman, filling the post left vacant by the departure of Robert Kaplan last fall after an outcry over the ethics of her active actions during the coronavirus pandemic.

Logan, executive vice president of the New York Fed and head of the Fed system’s open market account, will take up her new role on August 22, the Dallas Fed said in a statement.

The U.S. central bank is in the midst of its fastest policy tightening in decades to deal with inflation which is rising at its fastest rate since the early 1980s. Data released Wednesday showed that prices at the consumption increased at an annual rate of 8.3% in April. Read more

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Logan, 49, will join the presidents of the Fed’s other 11 regional banks and the Washington-based Fed Board of Governors in setting monetary policy for the world’s largest economy. Its first political meeting will take place on September 20 and 21.

She will be the first permanent female head of the Dallas Fed.

A senior official in the New York Fed’s markets division since 2012, Logan currently manages the central bank’s $9 trillion portfolio of securities, cash and other assets.

These holdings roughly doubled during the pandemic as the Fed sought to ease financial conditions and support the economy, and under Logan the Fed is now poised to cut these assets, starting next month, in part of its overall bid to raise US borrowing costs and slow growth.

“Lorie is a trusted colleague and dedicated public servant whose remarkable skills and experience with complex financial markets have informed our decisions and helped implement monetary policy to support the U.S. economy,” said the chairman of the Fed, Jerome Powell, in the press release.

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

The purpose of higher borrowing costs is to slow household demand for goods and services and business demand for workers fast enough to ease price and wage pressures and bring inflation back below target. 2% from the Fed.

Fed policymakers hope that can be done without undermining the strong labor market or plunging the economy into a prolonged slowdown.

As a Fed insider and market pundit, Logan diverges from the last two Dallas Fed presidents, both of whom came from outside the US central banking system.

Meredith Black has led the Dallas Fed on an interim basis since October after Kaplan, along with Boston Fed President Eric Rosengren, retired before the end of their terms. They quit amid revelations of personal trading even as the Fed bought up trillions of dollars in assets to stabilize markets, raising prices for the types of securities the two men traded.

Four other Fed banks also have women at their helm, including new Boston Fed President Susan Collins, currently provost of the University of Michigan. She will be the first black woman to serve as head of the federal bank when she takes office on July 1.

U.S. Senator Bob Menendez and fellow lawmaker Raul Ruiz, a U.S. Representative, said they were disappointed the Dallas Fed board did not choose what could have been the first Latino decision maker in the Fed.

“He missed an opportunity,” they wrote.

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Reporting by Ann Saphir in Berkeley, California. Editing by Paul Simao and Matthew Lewis

Our standards: The Thomson Reuters Trust Principles.

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