Boston Fed President Collins Expresses Caution on Further Rate Cuts

According to PANews, Boston Federal Reserve President Susan Collins, a voting member of this year's Federal Open Market Committee (FOMC), stated on Wednesday that the threshold for further interest rate cuts in the short term is "relatively high" due to ongoing concerns about elevated inflation. Last month, Collins voted in favor of a rate cut. Collins emphasized that unless there are clear signs of significant deterioration in the labor market, she would remain cautious about further easing of monetary policy, particularly given the limited inflation data available due to the government shutdown. In the current environment of high uncertainty, maintaining policy rates at their current level for some time might be appropriate to balance the risks of inflation and employment. Her remarks highlight the deep divisions within the Federal Reserve. Since the last rate cut, several voting and non-voting Fed officials, including Collins, have signaled increasing caution regarding further rate reductions. Collins noted that short-term borrowing costs are currently in a "mildly restrictive" range, while the overall financial environment continues to support economic growth. Although the labor market has shown signs of slowing, the downside risks have not intensified since the summer.