Fed's Collins Backs Holding Rates, Warns of Quick Hike If Inflation Stalls

Odaily News: Federal Reserve's Collins said she currently supports keeping interest rates unchanged, but this stance depends on seeing more progress in inflation cooling gradually toward the Fed's 2% target. Collins wrote: "To maintain the current target range for the federal funds rate, we need to continue seeing evidence that inflation is indeed declining. If evidence of sustained disinflation does not materialize, I think we should tighten monetary policy sooner rather than later."

She said recent inflation data showing moderate underlying price pressures is "somewhat encouraging," but added that monthly data can be volatile. "Whether the recent improvement can be sustained remains to be seen." Collins said tight interest rates combined with higher long-term yields should help ease some of the inflationary pressures from strong spending by households and businesses. She added that the impact of previous tariffs is expected to have largely faded, and the effect of rising oil prices on inflation should also begin to diminish. (Jin10)