Boston Fed President Susan Collins: More rate hikes may be needed despite recent inflation signs
Boston Federal Reserve President Susan Collins cautioned that despite recent positive signs on inflation, more interest rate hikes could still be necessary. In an interview with CNBC, Collins emphasized the importance of appreciating the good news but also staying the course, noting that additional firming may not be off the table.
While some Fed officials have also acknowledged the progress towards the Fed’s 2% 12-month inflation target, they have warned that there is still a way to go. Policymakers are cautious about repeating past mistakes of quitting efforts to bring down inflation too early.
The latest inflation reports indicated a slowing pace in both consumer and producer prices. However, Collins described the recent data as “noisy” and stressed the need to look at the full range of information to make real-time assessments.
Despite market expectations that the Fed will not hike rates during this cycle, Collins highlighted the progress in stabilizing the labor market and tightening financial conditions. She underscored the importance of patience and warned against prematurely declaring victory.
Looking ahead, Collins is not expected to be a voting member on the rate-setting Federal Open Market Committee until 2025. With the central bank’s benchmark borrowing rate at its highest level in 22 years, market pricing projects potential rate cuts in the coming months.
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