Susan Collins, President of the Boston Federal Reserve, hinted that the Fed might start lowering interest rates if inflation keeps decreasing. In an interview with the Providence Journal, Collins suggested that the central bank could soon adjust its policies.
Collins said, “If the data continues as I expect, it will soon be appropriate to ease how restrictive the policy is.” She believes that as long as the job market remains strong, inflation might gradually return to the Fed’s 2% target.
The Federal Open Market Committee (FOMC), which decides on interest rates, will meet in Washington, D.C., on September 17–18. The results of this meeting will be important in deciding the Fed’s next steps based on the current economic situation.
Despite recent reports showing slower job growth and an increase in the unemployment rate to 4.3% in July, Collins remains hopeful. She believes that the overall strength of the job market and steady economic growth will help keep jobs stable.
The Consumer Price Index (CPI), which recently dropped to 3%, shows that inflation is falling. This data will be updated on August 14 and will be crucial in guiding the Fed’s decisions. Collins emphasized the need to wait for more information before making any firm decisions.
In summary, Collins’ remarks suggest that the Fed might consider cutting interest rates if the economy continues to improve. The upcoming FOMC meeting and the new CPI data will play a key role in shaping future Fed policies.
