Collins Says 'Mixed' US Inflation Report Doesn't Warrant Rate Hikes

Boston Federal Reserve President Susan Collins said the latest US inflation report was 'mixed', with the headline rate stronger than expected but driven higher by various factors that don't necessarily warrant a hike in interest rates.

The Personal Consumption Expenditures Price Index rose at a 3.7% annual rate in July, well above the Fed's target, prompting some of Collins' colleagues to call for rate increases.

Collins, however, pointed out that the rise was largely driven by portfolio management fees and other market prices, which shouldn't push the central bank towards raising rates.

She noted that Boston Fed research suggests other reasons why price pressures may ease, including improved productivity and signs that inflation linked to Trump administration's import tariffs may have almost run its course.