Boston Fed President Collins advocates holding rates steady, sees ‘high bar’ for further cuts
Susan Collins, president and chief executive officer of the Federal Reserve Bank of Boston, during a Bloomberg Television interview at the Kansas City Federal Reserve’s Jackson Hole Economic Policy Symposium on Friday, August 22, 2025 in Moran, Wyoming, USA.
David Paul Morris | Bloomberg | Getty Images
Boston Federal Reserve President Susan Collins said Wednesday she would be reluctant to support further rate cuts anytime soon because inflation remains high and policymakers are hampered by a lack of data from the government shutdown.
“Given my baseline outlook, it would probably be appropriate to keep policy rates at the current level for some time to balance inflation and employment risks in this highly uncertain environment,” the central bank official said in a speech in his home district. he said. “I see several reasons why the bar for additional expansion in the short term should be relatively high.”
Collins’ comments are notable because he is a voting member of the rate-setting Federal Open Market Committee. These remarks, which underlined the rift among committee members, placed him on the hawkish side of the interest rate debate; This led Chairman Jerome Powell to say in October that a rate cut at the December meeting was not a foregone conclusion, although market pricing suggested it was highly likely.
Collins supported a quarter-point rate cut at the October meeting, but said further easing could hinder the Fed’s efforts to reduce inflation.
While Collins said the softness in the employment market was “worth watching,” he added that the risks of inflation remaining above the Fed’s 2% target should be cautious.
“In this context, providing additional monetary support to economic activity carries the risk of slowing down, or possibly even stopping, inflation’s return to target,” he said. “And although there are downside risks to employment, with demand remaining resilient, it does not appear to have increased further since the summer.”
Collins also noted the role the government shutdown played in the decision-making process. The stalemate appears to be over, but the White House press secretary said Wednesday that key reports on inflation and employment may not be available at all for October.
“Absent evidence of significant deterioration in the labor market, I would be hesitant to ease policy further, especially given the limited information on inflation due to the government shutdown,” Collins said.
The FOMC voted 10-2 for the cut in October. Governor Stephen Miran voted no because he wanted a larger cut, while Kansas City Fed President Jeffrey Schmid dissented because he supported no cuts.
