Boston Fed President Collins: Interest Rate Cuts are Risky

Boston Fed President Questions Rate Cut

Boston Federal Reserve (Fed) President Susan Collins expressed her opposition to the U.S. Central Bank cutting interest rates in December 2023 due to ongoing risks to inflation and employment targets.

Assessment of Interest Rate Decisions

In her statement, Collins said, "I see reasons to hesitate on lowering short-term borrowing costs at the December 9-10 Federal Open Market Committee meeting. After the total 50 basis points easing in September and October, I believe that policy is currently in a slightly restrictive range, and I assess this as appropriate given the current state of the economy."

Risks in Inflation and Labor Market

Collins noted that among the challenges facing the Fed are inflation risks and a weak labor market. Regarding monetary policy, she said, "I see risks on both sides; the issue is balancing these risks."

Observation and Data Expectation

Collins emphasized that the Fed has not yet made a definitive decision on what it should do, stating that she wants to see more data.