Collins Sees 'Mixed' US Inflation Report with No Immediate Rate Hike Needed

The Boston Federal Reserve President Susan Collins said that the latest US inflation report was 'mixed' in an interview at the Fed's annual economic symposium in Jackson Hole, Wyoming. The headline rate was stronger than expected, but driven higher by various factors that shouldn't push the central bank towards raising interest rates, according to Collins.

Collins cited the rise in portfolio management fees as one example, which is driven by stock values rather than supply and demand conditions. She noted that this should not be a concern for inflation. The Personal Consumption Expenditures Price Index rose at a 3.7% annual rate in July, well above the Fed's target of 2%, but Collins said she still expects inflation to fall on its own.

Collins also mentioned that Boston Fed research pointed to other reasons why 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. However, some of her colleagues have called for interest rate hikes in response to the strong inflation reading.