Boston Fed President Collins open to rate hike if inflation stays high

Boston Federal Reserve President Susan Collins said the latest U.S. inflation data were mixed and did not, by themselves, justify raising interest rates, although she is prepared to support a hike if inflation fails to ease. The Personal Consumption Expenditures Price Index rose at a 3.7% annual rate in July, above the Fed’s 2% target. Collins said the increase reflected a patchwork of factors, including higher portfolio management fees linked to stock valuations, while monthly inflation for market-priced goods and services was around target. She expects gradual disinflation under a policy rate that is slightly restrictive, supported by improved productivity and signs that tariff-related inflation may be nearing its end. Collins said higher bond yields had not yet indicated rising inflation expectations and declined to comment specifically on Treasury Secretary Scott Bessent’s recent bond-market intervention.

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