Boston Fed President Susan Collins expressed her preference for what she termed an “actively patient” approach to monetary policy, saying it remains appropriate amid rising uncertainty. Speaking today, Collins pointed to the fluidity in tariff developments and broader government policy shifts, which she said “validate the careful approach” Fed has taken so far in 2025. While she still expects gradual policy normalization to resume later this year, she warned her view “could change significantly as events unfold”.
Collins emphasized that much hinges on the nature of the “price shock” driven by tariffs. If price pressures fade quickly without unanchoring inflation expectations, and if the hit to real activity remains limited, she said it could support easing later in the year. However, if those conditions are not met, policy adjustments may be delayed.
For now, Collins views current monetary policy as “modestly restrictive,” and well-positioned to deal with a range of potential outcomes.
