Boston Fed President Collins advocates holding rates steady, sees 'high bar' for further cuts

Core Viewpoint - Boston Federal Reserve President Susan Collins expresses reluctance to support further interest rate cuts due to high inflation and limited data availability caused by the government shutdown [1][4]. Group 1: Interest Rate Policy - Collins indicates that it is likely appropriate to maintain current policy rates for some time to balance inflation and employment risks in a highly uncertain environment [2]. - Her comments reflect a hawkish stance within the Federal Open Market Committee (FOMC), suggesting a divide among committee members regarding future rate cuts [2]. - Despite supporting a quarter percentage point rate cut in October, Collins warns that further easing could hinder efforts to reduce inflation [3]. Group 2: Economic Conditions - Collins highlights that while there is softness in the labor market, the risks of inflation remaining above the Fed's 2% target necessitate caution [3]. - She notes that providing additional monetary support could risk slowing or stalling the return of inflation to target levels, especially given resilient demand [4]. - The ongoing government shutdown is impacting decision-making, with key reports on inflation and employment potentially unavailable for October [4][5]. Group 3: FOMC Voting Dynamics - The FOMC voted 10-2 in favor of the rate cut in October, with dissenting votes reflecting differing views on the extent of the reduction needed [5].