Boston Fed's Collins Backs Rate Hike Amid Elevated Inflation Risks

Boston Federal Reserve President Susan Collins expressed support for the recent interest rate hike by the US Federal Reserve, citing elevated inflation risks. The regulator increased its target range to 3.75-4.00% in an effort to curb price pressures.

In her statement, Collins noted that there is a growing likelihood of inflation exceeding the 2% target in the future. She emphasized that monetary policy can now focus on returning to price stability after five and a half years of excessively high inflation.

A somewhat tighter federal funds rate policy will help ensure a sustained return of inflation to its target, according to Collins. The Federal Reserve has forecast one more rate hike by the end of the year, but Chair Kevin Warsh did not confirm this prediction.