Fed's Collins: Inflation threat has receded, but need more evidence before policy normalization
|Boston Federal Reserve (Fed) President Susan Collins still expects the Fed to begin easing later this year, but progress on inflation has slowed and policymakers need to wait for more evidence that the road to 2% remains clear.
Key highlights
- Need to see more evidence that the disinflationary process will continue before carefully normalizing policy.
- More time is needed to discern if the economy is sustainably on the path to stability, while still maintaining a healthy labor market.
- Fed's Collins wants to see continued evidence that wage growth is not contributing to inflation.
- Return to 2% likely requires a moderating of the pace of demand growth.
- Looking for well-anchored inflation expectations and an orderly moderation in labor demand.
- Wants to see continued declines in housing price inflation and non-shelter services inflation.
- The threat of inflation remaining above 2% has receded.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.