09:36 AM EDT, 10/09/2024 (MT Newswires) -- The Federal Open Market Committee should proceed cautiously as it lowers interest rates so that it can be prepared for any surprises, Dallas Federal Reserve Bank President Lorie Logan said Wednesday at the Future of Global Energy Conference.

"If the economy evolves as I currently expect, a strategy of gradually lowering the policy rate toward a more normal or neutral level can help manage the risks and achieve our mandated goals," Logan said. "It should go without saying, though, that the future is uncertain. Any number of shocks could influence what that path to normal will look like, how fast policy should move and where rates should settle."

Logan emphasized that monetary policy is not on a preset course and that the FOMC should not rush to reduce rates to a more normal level while monitoring both the employment and inflation sides of their mandate as well as financial conditions.

"Downside risks to the labor market have increased, balanced against diminished but still real upside risks to inflation," Logan said. "And many of these risks are complex to assess and measure. As we complete the return to price stability and a well-balanced labor market, the path ahead is cloudy, not clear."

As a result, "the FOMC will need to remain nimble and willing to adjust if appropriate," Logan added.

Logan next votes on the FOMC in 2026.