Dallas Fed President Lorie Logan said on 10 November that the Federal Reserve needs at least two more quarter-point rate increases, and that it may be possible to move faster this winter. In a speech in Houston at the joint energy conference of the Dallas and Kansas City Feds, she said: “It remains clear to me, given the current outlook, that the FOMC needs to implement at least two more 25-basis-point rate increases.” She added: “It may be possible to move more rapidly this winter than the FOMC has moved so far this fall.”
The FOMC held the target range at 3.75 to 4 percent on 28 October. Two more 25-basis-point increases would take it to 4.25 to 4.50 percent, by our arithmetic. Using the figures in her speech, that would lift the real fed funds rate from 0.78 percent to about 1.28 percent, inside the 1 to 1.85 percent range of neutral-rate estimates she cited.
Business Pill · Financial Conditions Explained
An evergreen Business Engineer explainer on financial conditions, how the price and availability of money move markets. It teaches the general idea only and does not discuss the Fed or this speech.
The key insight: Dallas Fed President Lorie Logan said the FOMC needs at least two more 25-basis-point increases and that it may be possible to move faster this winter. She tied strong investment to data centers: computers, peripherals and communication equipment make up more than 80 percent of equipment investment growth. Two increases would move the range to 4.25 to 4.50 percent and the real rate to about 1.28 percent, by our arithmetic.
Logan made the same “at least two more” call in remarks to Davidson College students on 30 October. By our comparison of the two texts, the line about moving “more rapidly this winter” is new on 10 November. So is her reaction to the October inflation data released the same morning: “The Consumer Price Index for October came out this morning. It was higher than expected. I am concerned that PCE inflation could rise when we receive those data for October in a couple of weeks.”
The Bureau of Labor Statistics reported that the CPI for all urban consumers rose 0.4 percent, seasonally adjusted, in October after 0.6 percent in September. The index excluding food and energy rose 0.3 percent, as it did in September and August. The electricity index rose 0.9 percent. BLS said it cannot publish most 12-month changes for October 2026, because it did not collect October 2025 data during the 2025 lapse in appropriations.
Logan said the real fed funds rate is 78 basis points (3.88 per cent nominal less about 3.1 per cent expected PCE inflation), against neutral-rate estimates of 1 to 1.85 per cent across eight published models (Dallas Fed speech, 10 November 2026). The 1.28 per cent after two more 25-basis-point increases is our arithmetic, holding expectations unchanged.
What Was Posted on X
FED’S LOGAN SAYS THE FED NEEDS “AT LEAST TWO MORE” RATE HIKES, POSSIBLY FASTER THIS WINTER
“Excess inflation is unacceptable… It may be possible to move more rapidly this winter than the FOMC has moved so far this fall,” after that it would make sense to pause & reassess.
Wall St Engine’s post on 10 November summarised Logan’s call for at least two more rate hikes. We checked it against the Dallas Fed’s published speech text and quote that text above.
Where AI Shows Up in Her Case
Logan tied the strength of investment to the AI build-out. “Real business investment in equipment rose 14 percent in the third quarter from a year earlier,” she said. Computers, peripherals and communication equipment, “the categories used in data centers”, make up more than 80 percent of that growth.
She said investment is broadening “as companies build out the artificial intelligence supply chain”. Industrial machinery has accounted for about 5 percentage points of annualized equipment investment growth in recent months, a category that includes semiconductor manufacturing equipment and “gas turbines used to generate power for data centers behind the meter”.
ChatGPT came up in her argument that central bankers “must not be too eager to call shocks temporary”. Her words: “The large language model that underpinned the first public release of ChatGPT in November 2022 has long since been retired. Yet it launched an era of intense innovation and investment whose effects have only grown with time.” She did not put a number on AI’s contribution to inflation.
She also cited Dallas Fed work on how the data center buildout is moving electricity prices. A Dallas Fed working paper by Owen Kay, Robert Reaser and Reid Taylor, revised in October 2026, estimates that data centers raised wholesale electricity prices by 6.9 percent nationally by 2025 and by 15.0 percent in northern Virginia. Under the authors’ preferred scenario, the national effect reaches 12.3 percent by 2028. Our recent reporting tracked the same pressure in Texas, where data centers are seeking 4.6 times the state’s peak demand.
AI also figured in her explanation of the October pause. The FOMC skipped an increase after markets “had been volatile in the weeks before the meeting in response to news on the technology investment outlook and geopolitical developments”. Among the risks to her outlook: “Business investment could strengthen or falter as companies learn more about the uses of artificial intelligence and governments consider policies toward this potentially transformative technology.”
The Real-Rate Arithmetic
Logan said estimates of the neutral real interest rate across eight published models “currently range from 1 to 1.85 percent”. The fed funds rate is 3.88 percent in nominal terms, and surveys suggest people expect PCE inflation to run around 3.1 percent in the near term. “That makes the real fed funds rate 78 basis points, or a quarter-percentage-point below the lowest estimate of neutral,” she said.
Adding the 50 basis points she called for, and holding the 3.1 percent expectation unchanged, gives a real rate of about 1.28 percent, by our arithmetic. That is 0.28 point above the lowest neutral estimate and 0.57 point below the highest. She said the target range is at least 50 basis points below “the level that would create some modest restriction”, and that after two more increases “it would make sense in my view to pause and examine economic and financial developments”.
Over the 12 months through September, the PCE price index rose 3.6 percent and core PCE 3.1 percent, Logan said. The New York Fed’s multivariate core trend measure was 2.8 percent, and the Dallas Fed’s trimmed mean 2.3 percent, which her staff’s research finds is likely lower than the true inflation trend. Prices for non-housing, non-transportation core services rose 3.2 percent, which she said is eight tenths of a point above the pace historically consistent with the 2 percent target.
She said inflation has exceeded the target “for nearly six years”, and that “Excess inflation is unacceptable.” Central banks elsewhere are making a similar case about AI: the Reserve Bank of Australia’s Sarah Hunter said AI lifts prices first, as we reported on 10 November.
The Structural Read
As we read it, Logan’s case treats the AI build-out as a demand force the Fed has to lean against now, not a productivity story it can wait for: her ChatGPT passage is an argument against calling a shock temporary.
As we read it, the real-rate arithmetic is the new part of the 10 November text: it gives a measurable bar, a real rate inside the 1 to 1.85 percent band, against which each increase can be judged.
Lorie Logan, President, Federal Reserve Bank of Dallas, 10 November 2026
“Sometimes, a shock kicks off a new trend that will affect inflation for some time.”
Three Implications
FOR AI BUILDERS AND THEIR LENDERS Logan said credit spreads remain compressed by historical standards and banks remain eager to lend; she called financial conditions a tailwind.
FOR POWER BUYERS A Dallas Fed working paper estimates data centers raised wholesale electricity prices 6.9 percent nationally by 2025; the BLS electricity index rose 0.9 percent in October.
FOR RATE WATCHERS Logan said that after two more increases it would make sense to pause and examine economic and financial developments.
The framework describes the AI build as having “a dual character that is simultaneously a bubble and a supercycle”.
As we read it, Logan’s speech sits on the macro side of that loop: data center investment is strong enough to show up in her rate case, while she flags that business investment could strengthen or falter. The framework predates the speech and does not discuss it.
What Is Not Established
Logan spoke for herself: “These are my views and not necessarily those of my FOMC colleagues.” The FOMC held rates on 28 October by a 10-2 vote, with Lisa Cook and Beth Hammack preferring a quarter-point increase. Logan did not say the increases are aimed at AI, and did not quantify AI’s effect on inflation.
The 1.28 percent figure assumes inflation expectations stay at 3.1 percent and the effective rate moves one for one with the range. The electricity estimates are the working paper authors’ model results, not Fed policy, and we read the paper’s abstract only. We did not watch the event video or any question-and-answer session.
This Week In The AI Supercycle
The Great Convergence of Capital, Power, and Geopolitics
This week’s issue: for two years the AI build-out was priced as a supply story, and last week as a credit story. This week it was priced as a permission story, and the answer arrived as a cost, not a ban.
Logan repeated her call for at least two more quarter-point increases and added that it may be possible to move faster this winter, after an October CPI she called higher than expected. Her case leans on investment led by data center equipment. By our arithmetic, two increases would move the target range to 4.25 to 4.50 percent and the real rate to about 1.28 percent, inside the neutral range she cited.
A note on sourcing. Quotations are from the Dallas Fed’s published texts of Lorie Logan’s 10 November and 30 October 2026 remarks. Rates are from the FOMC statement of 28 October 2026 and CPI data from the BLS release of 10 November 2026. The electricity estimates are from the abstract of Dallas Fed Working Paper 2606; we did not read the full paper. We found the story through an X post by Wall St Engine. The 4.25 to 4.50 percent range and the 1.28 percent real rate are our arithmetic.
Gennaro Cuofano is a CRO and tech executive who has worked in AI since late 2015, starting with bringing NLP, natural-language generation, voice and chatbot products to the marketing industry. His background is in law and finance: he holds a Master's degree in Law and an International MBA with an emphasis on corporate finance (LUISS Business School and the University of San Diego, 2012), and worked as a financial analyst at a real-estate investment firm in San Diego and as an assistant controller. His work focuses on business model strategy, business engineering and, more broadly, structural analysis: how companies make money, read from their own filings. He created FourWeekMBA and leads research there and at The Business Engineer, his newsletter on AI and business strategy, with over 95,000 subscribers and more than 1,000 published analyses. His writing has also appeared on Entrepreneur (for example, How to Digitize a Family Business in Europe) and HackerNoon. Find him on LinkedIn and Substack. See how we source.
