Boston Fed President Susan Collins Conditions Rate Hold on Inflation

President of the Federal Reserve Bank of Boston Susan Collins stated that her support for holding interest rates steady depends on continued progress toward the central bank's 2% inflation target. In an essay published Tuesday, Collins warned that policy tightening would be appropriate if sustained inflation progress does not materialize.

Collins described recent inflation data as "mildly encouraging" but cautioned that monthly readings remain volatile. She identified several upside risks to inflation, including potential adverse supply shocks, stronger-than-expected economic activity, and upward pressure on core goods inflation driven by the AI build-out.

These comments come as Federal Reserve policymakers prepare for their next meeting on September 15-16 in Washington. During the previous meeting in July, officials left rates unchanged, although some policymakers favored a quarter-point hike.