Lorie Logan, President of the Federal Reserve Bank of Dallas, stated that payroll gains have been 'pretty weak,' describing the situation as 'uncomfortable' during a speech at her bank on Thursday [1]. She noted that the labor market stabilized in the second half of 2025 into this year, and highlighted that immigration has changed the job market breakeven to close to zero [1]. Logan also commented that she was not convinced inflation was easing enough even before the Iran war started, and pointed out that business investment remains strong while consumers have been resilient [1].
Logan emphasized that the Fed should not let balance sheet issues distract from its main mission, and that central bank balance sheet growth is not necessarily bad if it meets the public's needs [1]. She explained that the US central bank's balance sheet policy should be driven by what is best for the economy, and that it costs the Fed little to meet bank reserve demand [1]. Logan discussed several options for lowering the size of the Fed balance sheet, noting that pushing banks to economize reserves would increase financial system risk, and that broadening access to Fed liquidity tools could also lower reserves demand [1].
Regarding the Iran war, Logan said it has increased the level of uncertainty and risk on both sides of the Fed's mandate, making the most recent round of Fed forecasts quite challenging [1]. She stated that a swift resolution to the war may mean the economic impact could be moderate, and that policy is positioned to respond to data, with the Fed prepared to make adjustments as needed [1]. Logan added that the US has some buffers to impacts from the war [1].
On energy, Logan raised the question of whether war disruptions would induce investment in US energy production, but reported, 'I am not hearing we will see 'dramatic' US energy production increase so far.' She noted that energy producers appear to need extended higher prices to boost production [1].
In currency markets, the US Dollar was the strongest against the Swiss Franc, rising 0.48% today, and also posted gains against other major currencies including the Euro (+0.33%), British Pound (+0.46%), Japanese Yen (+0.30%), Canadian Dollar (+0.32%), Australian Dollar (+0.23%), and New Zealand Dollar (+0.42%) [1].
CONCLUSION
Fed President Logan's remarks highlight weak payroll gains and increased uncertainty due to the Iran war, with the Fed maintaining a flexible policy stance. The US Dollar strengthened against major currencies, reflecting market resilience. While business investment and consumer activity remain strong, the outlook is clouded by labor market softness and geopolitical risks.