Federal Reserve official Collins said she currently supports leaving interest rates unchanged, but that view depends on seeing more evidence that inflation is easing and moving toward the Fed’s 2% target. She said policy should be tightened soon if that evidence does not appear. Collins added that recent inflation readings showed mild underlying price pressures, which she called somewhat encouraging, though monthly data can be volatile. She also said higher rates and rising long-term yields should help ease some of the inflation pressure from strong household and business spending. Collins said the impact of earlier tariffs appears to have largely faded, while the effect of higher oil prices on inflation should also start to diminish.
Federal Reserve official Collins said she currently supports keeping rates unchanged, but that stance depends on seeing more progress in inflation easing toward the Fed’s 2% target.
She wrote that holding the current target range requires continued evidence that inflation is clearly falling. If that evidence does not show up, she believes policy should be tightened soon.
Collins said recent inflation data showed mild underlying price pressures, which she called somewhat encouraging. She added that monthly figures can be volatile, and said it remains to be seen whether the recent improvement can last.
She also said tighter rates, together with higher long-term yields, should help offset some of the inflation pressure coming from strong household and business spending.
Collins added that the effect of earlier tariffs now appears to have largely faded, and that the inflation impact of rising oil prices should also start to ease.
(Jin10)
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