Fed Official Backs Rate Hike Amid Persistent Inflation Risks

Boston Federal Reserve President Susan Collins has expressed support for the recent interest rate hike by the US central bank. Collins cited growing risks that inflation could remain above the Fed's 2% target, which is a key challenge for policymakers.

The Fed raised its benchmark interest-rate target last week to a range of 3.75%-4.00%, marking its first rate increase in more than three years. According to Collins, the improving labor market gives monetary policymakers greater scope to focus on restoring price stability.

Collins indicated that a somewhat more restrictive monetary policy stance would be needed to ensure inflation returns to the Fed's target on a sustained basis. However, she did not specify whether she favors another rate increase in the future.