Susan Collins, Boston Fed President, spoke at the Jackson Hole symposium, sharing her views on the forthcoming Fed interest rate decision.
Economic Conditions and Labor Market
Collins noted that labor market growth has slowed, but core economic indicators remain solid. She emphasized, "This is a complex picture. We need to balance both the potential rise in unemployment and the risks of inflation."
Monetary Policy and Tariff Impact
The Boston Fed President stated that the current monetary policy is 'moderately restrictive', which is appropriate given current conditions. She also highlighted that data releases in the next four weeks will be critical. Collins explained, "Tariffs have a broad impact on intermediate goods, not just direct imports. Therefore, we expect inflation to remain elevated until the end of the year."
Prospects for Rate Cuts
Regarding the labor market, Collins noted that although employment growth has slowed, some indicators remain strong. She added, "If the risk of layoffs increases, it may be appropriate to reduce the restrictive nature of policy."
Susan Collins' statements highlight the uncertainty surrounding the Fed's interest rate decisions amid changing economic conditions.
