The FXTM Fed hawks suddenly "turned doves", and the end signal of this round of interest rate hikes has come?

On Monday (October 9), Dallas Federal Reserve Chairperson and FOMC (FOMC) voting committee Logan said that the recent rise in long-term U.S. Treasury yields and the general tightening of financial conditions may mean that the Federal Reserve is less necessary to raise interest rates further. "Fed mouthpiece", Wall Street Journal reporter Nick Timiraos said that Logan has been a hawkish member of the FOMC, and he is particularly concerned about the recent rise in U.S. Treasury yields and term premiums.

On Monday (October 9), Dallas Federal Reserve President Logan said that the recent rise in long-term U.S. Treasury yields and the general tightening of financial conditions may mean that the Federal Reserve needs to raise interest rates further.

"I expect continued restrictive financial conditions to be necessary to restore price stability in a sustainable and timely manner," said Logan, one of the Fed's more hawkish policymakers, in prepared remarks to the National Association for Business Economics. "I remain concerned about risks on both sides of our mandate. High inflation remains the most important risk in my view. We cannot allow it to become entrenched or reignite.""Fed mouthpiece," said Nick Timiraos, a Wall Street Journal reporter. Logan has been a hawkish member of the FOMC, and he has taken the recent rise in Treasury yields and term premiums particularly seriously. As a result, her belief in the need for another rate hike sounds to be waning. The "reason" for the recent Treasury sell-off is important to the Fed.

Since the Federal Reserve last raised its policy rate to a range of 5.25% to 5.50% in July, long-term Treasury yields have risen sharply, causing borrowing costs to rise and dampening surprisingly strong economic growth and job creation.

Mr. Logan said how much more the Fed's policy-setting FOMC needed to do would depend largely on how much of the recent tightening in financial conditions was due to expectations for the economy and compensation demanded by investors for holding longer-dated Treasuries, known as "term premiums".

"If long-term rates remain high because of the high term premium, the need to raise the federal funds rate may decrease," Mr. Logan said. "However, to the extent that economic strength drives long-term rates higher, the FOMC may need to do more."

Ms Logan said the higher term premium played a "clear role" in the rise in long-term yields, citing survey results, modelling and her own assessment of investor expectations that the Fed would continue to allow its balance sheet to shrink even as it began to lower interest rates in response to falling inflation.

"Over time, the expected decline in the Fed's asset holdings means that other investors will need to hold more long-term securities, which appears to be one of many factors contributing to the rise in term premiums," Mr. Logan said.

But Logan said it's complicated to figure out how much of the rise in long-term rates is due to rising term insurance premiums.

"I will carefully assess economic and financial developments to assess the extent of additional policy tightening that may be appropriate to carry out the FOMC's mandate," Mr. Logan said.