Collins Backs Rate Hike, Warns of Elevated Inflation Risks

Boston Federal Reserve President Susan Collins expressed her support for last week's interest rate hike by the US central bank, citing elevated inflation risks.

In a LinkedIn post on Tuesday, Collins stated that she now sees an increased likelihood of future scenarios where inflation remains above the 2% target.

The Fed raised its interest rate target to the 3.75%-4.00% range last week in an effort to curb price pressures and ensure a timely return to price stability after five and a half years of too-high inflation.

Collins emphasized that a somewhat more restrictive federal funds rate will help ensure that inflation durably returns to target, despite the current challenges posed by supply shocks such as the US-Israeli war with Iran.