Fed’s Collins eyes prolonged restrictive rates

Boston Fed President Susan Collins noted overnight her expectation that the central bank may need to maintain interest rates at restrictive levels “for some time” until there’s tangible evidence of inflation moving back to 2% target.

While acknowledging that the policy rates might currently be near their peak, Collins did not rule out the possibility of additional rate hikes.

She stated, “And while we are likely near, and could be at, the peak for policy rates, further tightening could be warranted depending on incoming information.”

Amidst the pervasive economic uncertainties and risks characterizing the current financial climate, Collins remains cautiously optimistic. She believes that the restoration of price stability is achievable, anticipating an “orderly slowdown in activity and only a modest increase in the unemployment rate.”