Fed’s Collins (2028 voter) expects Fed rate target to hold steady ‘for some time’ and now is time for Fed to be patient and deliberative with rate policy; To cut rates again, need to see clear evidence inflation ebbing
- Sees no urgent need to change monetary policy stance.
- Job market appears relatively stable.
- Outlook for inflation is uncertain with upside risks.
- Expects inflation to ease slowly to 2% target.
- Fed policy is currently well positioned.
- Latest on tariffs could bring more inflation pressure.
- Current economic outlook is fairly benign.
- Financial conditions support expansion.
- Possible hiring pace may be pick up, but likely to remain modest.
- Outlook attended by considerable uncertainty
Context
Fed’s Collins suggests that there will be no imminent rate cuts as the current monetary stance is appropriate, indicating a patient approach is needed before making any decisions. Insight into the job market stability combined with uncertain inflation risks suggests the Fed may prefer to maintain a steady policy while observing economic trends, particularly inflationary pressures from tariffs. This stance could reinforce the current rates and impact expectations around future monetary tightening or easing across various asset classes, especially in FX and fixed income markets.
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