By Michael S. Derby
BOSTON (Reuters) – Federal Reserve Bank of Boston President Susan Collins said Friday she wants to see more data before deciding whether the central bank should cut rates again at its policy meeting next month.
Speaking on Bloomberg’s television channel, Collins said when it comes to a rate cut following three quarters of a percentage points’ worth of cuts at the last two meetings, “I certainly wouldn’t take December off the table. But again, we’re not on a preset path and so we’ll have a look carefully at the data and see what make sense when we get” to the next Federal Open Market Committee meeting, she said.
Markets are questioning whether the Fed will press forward with rate cuts at its next meeting in the wake of some new data pointing to firmer inflation pressures. This comes also at a time when Donald Trump has been elected president again on an economic platform of trade tariffs and mass deportations, which broad swathes of economists expect will reignite inflation.
On Thursday Fed leader Jerome Powell said “the economy is not sending any signals that we need to be in a hurry to lower rates,” with economic strength allowing officials the space to deliberate on monetary policy “carefully.” Powell declined to say how Trump’s preferred policy path will affect the economy and Collins did likewise in her interview.
The Boston Fed leader noted monetary policy is still restricting the economy and said “normalizing that will be important.” She described monetary policy as “well positioned” given where the economy is right now, with a healthy labor sector and a general moderation in price pressures.
