Speaking to Bloomberg during the Jackson Hole Economic Symposium, Boston Federal President Susan Collins said the interest rate decisions to be made at the next Fed meeting are not yet clear.
Collins added that while the labor market has slowed growth, the economic foundation remains solid, “this is a complicated picture. We need to balance both the potential increase in unemployment and the risk of inflation.”
Collins said monetary policy is currently “moderately restrictive” and is appropriate given current conditions. However, he argued that it was important that data be released over the next four weeks. “We’ll see more data before we make a decision,” he added. “Nothing is certain now. All the options are on the table.”
Federal President Boston said he is closely monitoring tariff inflationary pressures. Collins said, “Taxes will have a broad impact on intermediate goods, not just direct imports. Therefore, I expect inflation to rise until the end of the year. My baseline scenario is to decrease next year, but I will not rule out the possibility of a more lasting impact.”
Regarding the labor market, Collins noted that employment growth has slowed down, but some indicators remained strong. “As the risk of layoffs increases, it may be appropriate to reduce the restrictive nature of the policy,” he said.
*This is not investment advice.
