US Fed's Collins Backs Rate Hike as Inflation Risks Persist

The US Federal Reserve's decision to raise interest rates has been supported by Boston Federal Reserve President Susan Collins, who cited growing risks that inflation could remain above the Fed's 2% target.

Collins stated that the improving labor market gives policymakers greater scope to focus on restoring price stability and indicated a somewhat more restrictive monetary policy stance would be needed to ensure inflation returns to the Fed's target on a sustained basis.

The Federal Reserve raised its benchmark interest-rate target by 25 basis points last week, marking its first rate increase in over three years. Policymakers' latest projections also indicate another quarter-point increase could come before the end of 2026.