By Ann Saphir AUSTIN, Texas (Reuters) -Federal Reserve Bank of Dallas President Lorie Logan on Thursday said the U.S. central bank appropriately cut rates last month to guard against the risk of a sharp deterioration in the job market, but said that so far the cooling is gradual and signaled she is not eager to cut rates further. "We need to be very cautious about rate cuts from here and make sure that we appropriately calibrate policy so that you don't ease conditions too much and only to have to reverse course, which would be very painful in terms of restoring price stability," Logan told a classroom of economics students at the University of Texas at Austin's graduate school of business. "With expectations for tariffs and other pressures to lead to inflation trending a bit higher in coming months, my forecast has a little bit slower normalization of the policy path in order to make sure we get all the way to 2%." Logan, who is not a voter on the Fed's policy-setting committee this year, said she supported the Fed's September decision to reduce the policy rate a quarter of a percentage point as "insurance" against a sudden rise in the unemployment rate, which in August was 4.3%. The government shutdown means the Labor Department will not publish its usual monthly jobs report on Friday, but other indicators suggest that while the labor market is sluggish the unemployment rate did not jump last month. "My forecast is for that to rise a little bit in coming months, but not too far from the objective," Logan said. Inflation, however, has been above the Fed's 2% target for four years and tariffs are pushing it upward, she said. "The thing that I worry about is even if it's a one-time effect, like the economic modeling would suggest, the longer it takes or the more uncertainty there is about these tariff policies, the more risk there is that the short-term inflation expectations that have increased become entrenched over the long term," Logan said. "The risk of those inflation expectations becoming entrenched has certainly gone up, and so we need to guard against that in thinking about policy." (Reporting by Ann Saphir; Editing by Andrea Ricci)
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