Fed’s Collins warns against overreacting to short-term inflation data

In a speech, Boston Fed President Susan Collins cautioned against overreacting to “a month or two” of improvements in inflation data. She emphasized, “It is too soon to determine whether inflation is durably on a path back to the 2% target.” Collins urged patience in the approach to monetary policy, reflecting the need for a cautious stance.

“In my view, the data suggest an economy with demand and supply coming into better balance, as required to restore price stability,” Collins said. “However, this process may just take more time than previously thought.”