Collins Says US Inflation Report Shows 'Mixed' Signals

Boston Federal Reserve President Susan Collins said the latest US inflation report was 'mixed', with some promising signs but also concerns that could push the central bank towards raising 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 say it was time for rates to rise.

Collins cited the rise in portfolio management fees as one example that left her still with an outlook in which inflation is likely to fall on its own. However, she noted that she is ready to raise rates if it does not.

Collins said that once the data was 'unpacked', there were some promising signs, including the fact that monthly inflation for goods and services where prices are set by market forces was around the Fed's 2% target. She also pointed to Boston Fed research indicating that other reasons price pressures may ease, including from improved productivity and indications that inflation linked to the Trump administration's import tariffs may have almost run its course.