Collins Sees Mixed US Inflation Readings as Gradual Disinflation Remains On Track

Boston Federal Reserve President Susan Collins said that the latest US inflation readings are 'mixed' and do not change her outlook for gradual disinflation. The Personal Consumption Expenditures Price Index rose at a 3.7% annual rate in July, well above the Fed's target of 2%. However, Collins noted that the rise in portfolio management fees driven by stock values is not a concern.

Collins said she is ready to raise interest rates if inflation does not fall on its own. She cited Boston Fed research pointing to other reasons price pressures may ease, including improved productivity and indications that inflation linked to the Trump administration's import tariffs may have almost run its course.

Collins also mentioned that estimates of inflation compensation demanded by investors are 'consistent with price stability'. However, she did not rule out the possibility of future rate hikes, saying she would assess how things evolve and address it as appropriate.