Boston Federal Reserve (Fed) President Susan Collins signaled on Tuesday that the central bank could proceed with further interest rate cuts, but only if economic conditions evolve in line with expectations. She cautioned against aggressive easing, warning that such a move could reignite inflation pressures.
Key takeaways from Collins’ remarks
- Gradual rate cuts are likely if the economy meets the Fed’s baseline outlook
- Aggressive easing poses risks of fueling inflation
- Collins said the economic outlook remains broadly aligned with Fed forecasts
- Supportive financial conditions allow the Fed time to assess incoming data
- Inflation management remains a top priority despite softer labor market signals
