Boston Fed President Collins comments on interest rates

The Fed’s Collins wants more confidence that inflation will slow before cutting rates. Boston Fed President Susan Collins said on Wednesday that inflation will likely take longer than expected to return to the central bank’s target, but she said policymakers should be careful not to wait too long to start normalizing rates. “The recent upside surprises in activity and inflation suggest that we are likely to keep policy at its current level until we have greater confidence that inflation is moving toward 2% on a sustained basis,” Collins said in a speech at the Massachusetts Institute of Technology. Examining the conditions that need to be met before cutting, Collins said she is focusing on inflation expectations, signs of further disinflation, signals from wages and moderation in the labor market. “The current situation requires a methodical commitment, recognizing that progress will take time and will continue to be uneven. Waiting for all the indicators to align is too high a bar to start normalizing policy,” she added.