Fed Officials Warn Painful Inflation Fight Looms Ahead

A top Federal Reserve official, Susan Collins, said that fighting stubborn inflation will be 'painful'.

Collins, president of the Federal Reserve Bank of Boston, supported a recent rate hike and expects another one later this year. She cited high inflation, exacerbated by geopolitical developments and solid business and consumer spending, as key reasons for her decision.

In an interview with The Associated Press, Collins said she did not see sufficient progress in reducing inflation to the Fed's 2% target of 5 years. 'I did not see the inflation progress I was hoping to see,' she stated.

Austan Goolsbee, president of the Chicago Fed and soon-to-be voter on rate decisions, echoed Collins' views, saying that stubborn inflation may require 'pain' in the form of higher unemployment to combat. He suggested that businesses may pass on rising costs to customers, which could push up measured inflation.