Fed's Collins: Economy may need to weaken for 2% inflation
During an event at the Massachusetts Institute of Technology on Wednesday, Susan Collins, the President of the Federal Reserve Bank of Boston, expressed that there has been minimal advancement in controlling inflation in 2024. She emphasized that in order to achieve a sustainable decline in inflation towards the Federal Reserve's target of 2%, it will be imperative to adopt a slower pace of economic growth.
In terms of monetary policy, she mentioned that considering the unexpected positive developments in economic activity and inflation, it appears necessary to maintain the current policy stance until we are more confident that inflation is consistently progressing towards the target of 2%.
Collins expressed that she is closely monitoring the trend of inflation, particularly in the housing and services sectors, before considering the possibility of reducing rates. Additionally, she is paying attention to indicators that reflect both short-term and long-term inflation expectations to ensure they remain stable.
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