In a speech today, Boston Fed President Susan Collins acknowledged that the outlook is “highly uncertain.” However, she acknowledged that inflation risks tied to the labor market have diminished. Thus, “the upside inflation risks I was concerned about a few months ago are more limited,” she added.
Against this backdrop, Collins said she is open to more cuts if conditions justify them. “In this context, it may be appropriate to ease the policy rate a bit further this year – but the data will have to show that,” she cautioned.
Overall, She emphasized that policy should remain “modestly restrictive” to restore price stability while guarding against further labor market weakening.
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