Federal Reserve Bank of Boston President Susan Collins reiterated that more interest-rate increases are needed to tame inflation and that her view on how high rates will need to go is unaffected by recent economic reports.
Collins, speaking more than a week after Labor Department data showed that consumer-price gains softened in October by more than expected, said the Fed has more work to do.
“I expect this will require additional increases in the federal funds rate, followed by a period of holding rates at a sufficiently restrictive level for some time,” Collins said Friday in remarks at a conference hosted by the Boston Fed. “The latest data have not reduced my sense of what sufficiently restrictive may mean, nor my resolve.”
Fed officials lifted interest rates by 75 basis points for the fourth straight time on Nov. 2, bringing the target on the benchmark rate to a range of 3.75%-4%. Several policymakers have signaled they may consider a 50 basis-point increase when they meet in mid-December, depending on what happens with the economy.
Collins didn’t specify in her remarks what size rate move she would support at the December meeting, but has previously said that all increments for rate increases should be on the table and that the risks of overtightening are increasing as the Fed raises rates.
She reiterated in her remarks that she remains “optimistic that there is a pathway to reestablishing price stability with a labor market slowdown that entails only a modest rise in the unemployment rate.”
Collins was speaking at a conference dedicated to examining shifts in the labor market and the potential impact of long-run implications from the pandemic.
This article was provided by Bloomberg News.