Boston Fed President Collins: New interest rate cuts are difficult for the economy.

Boston Fed's Latest Report on Interest Rate Outlook

Boston Fed President Susan Collins stated that she supported the decision to cut interest rates in the recent policy meeting. However, she emphasized that new rate cuts would come under quite challenging conditions.

Current Economic Uncertainty

Collins expressed her belief that it would be appropriate to keep interest rates at current levels for some time in the existing uncertain economic environment. In her speech in Boston, she said, "To balance inflation and employment risks, keeping interest rates at current levels is likely the most suitable policy. There is a relatively high threshold for additional easing in the near term," she stated.

Inflation Target and Economic Demand

Speaking for the first time since the Fed's meeting on October 29, Collins noted that further lowering interest rates could slow the return to the 2% inflation target. She highlighted that demand in the economy remains strong, stating, "Unemployment may rise a bit, but I do not think the labor market has worsened since the summer," while also assessing the situation in the labor market.