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Boston Fed's Collins leaves door open to a September rate hike

Collins said inflation has stayed above the Fed's 2% target for more than five years, and persistent energy costs are squeezing lower- and middle-income households in the Northeast.

Reported · Written up by our desk · Central Banks

Boston Fed President Susan Collins said she could support a rate increase in September if inflation does not ease enough, citing ongoing cost-of-living pressures that have been intensified by the Iran war, Action Forex reported.

Speaking in an interview with the Financial Times on Wednesday, Collins said she is prepared to raise rates if economic conditions in the coming months call for tighter policy, while backing keeping rates unchanged in July and viewing current policy as only slightly restrictive.

Collins added that inflation is continuing to squeeze both businesses and households across the US Northeast, where price concerns have surfaced in nearly every conversation with firms, with lower- and middle-income households facing particular pressure as elevated energy costs add to broader affordability problems.

While she expects inflation to decline gradually, Collins stressed that price growth has remained above the Fed's 2% goal for more than five years, leaving policymakers little room for complacency. Action Forex said her comments reinforce how difficult the Fed's September decision could be if upcoming data disappoint, even though Collins is not currently a voting member of the FOMC.

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