Boston Fed President Susan Collins said overnight that the Fed should remain “actively patient” in its stance. Despite the complexity of current conditions, she argued that “solid” fundamentals give the Fed room to carefully assess incoming data before making policy moves. “Calibrating appropriate policy in this context is challenging,” she acknowledged in her speech.
Collins highlighted the inflationary impact of newly imposed trade tariffs, which she said are beginning to show up in the prices of some goods. She projected core inflation to climb toward 3% by the end of the year, while warning that growth and employment may slow as a result.
However, she pointed to mitigating factors—such as firms narrowing profit margins and consumers maintaining spending. “As a result, the adverse impact of tariffs on labor market conditions and economic growth may be more limited,” she said.
