Collins Sounds Alarm on Persistent Inflation

Boston Federal Reserve President Susan Collins has sounded an alarm on inflation's persistence, stating that the probability of it remaining above the Fed's 2% target in future scenarios has increased.

The culprit behind this stubborn price problem is a combination of supply shocks and resilient demand. Geopolitical tensions in the Middle East have put upward pressure on energy prices, while strong consumer spending continues to provide a floor under prices.

Collins backed the Fed's recent quarter-point rate hike, which brought the benchmark interest rate to approximately 3.9%. This move reflects a central bank still in fighting mode more than five years after inflation first blew past its target and never really came back down.