Inflation is 'much too high,' Dallas Fed president says

May 18 (UPI) -- Though slowing relative to year-ago levels, inflation in the U.S. economy is "much too high" and remains a lingering concern, the president of the Federal Reserve Bank of Dallas said Thursday.

Dallas Fed President Lorie Logan said that consumer prices increased over the past year by more than 4%, in terms of personal consumption expenditures. That's twice as high as the goal set by the U.S. central bank.

"Inflation remains much too high," she said.

Consumer prices remain elevated despite a successive series of rate hikes from the Federal Reserve. The Fed on May 3 announced its 10th interest rate hike in a row, raising the federal funds rate to a target range of 5% to 5.25%.

Pointing to recent data, Logan said that the slowdown in consumer-level inflation was largely a result of trends in the commodity sector, where crude oil prices are about 30% below year-ago levels.

But stripping out volatile food and energy prices shows inflation remains entrenched.

Elsewhere, apart from inflation, the Fed is watching developments in the banking sector, where a string of failures has led to concerns about a repeat of the so-called Great Recession, which was triggered in part by the collapse of Lehman Brothers in the mid-2000s.

Logan said the collapse of Silicon Valley Bank earlier this year was a test given the pace at which economic developments occur in the digital age. Testifying before congressional leaders earlier this week, former CEO Gregory Becker said about $1 million was taken out of the bank every second as borrowers responded in droves to liquidity concerns.

"As the authorities continue to learn from the recent episode, it will be valuable to examine how supervision and regulation can best take operational readiness into consideration," Logan said.

Officials have pointed fingers at both economic policymakers and the banks themselves for recent concerns in the financial sector.

The Federal Reserve releases the latest minutes from the Federal Open Market Committee ahead of the June meeting on the next move in rates. Logan offered something of a wait-and-see approach, but suggested she was leaning in favor of another hike.

"I'm keeping an open mind and a close watch on economic developments as we head toward the next FOMC meeting in mid-June," she said. "As of today, though, I remain concerned about whether inflation is falling fast enough."