Fed's Collins: Proceeding Cautiously on Future Rate Hikes

Boston Federal Reserve President Susan Collins advocates for a cautious approach to policymaking, stating that the Fed may be near or at the peak for interest rates but more increases could be necessary depending on future data. Collins, along with other key central bankers, supports a patient approach while remaining data-dependent and flexible. She notes some positive developments on inflation but cautions that it is too early to conclude that inflation is on a sustained path back to the target of 2%. Collins also highlights the potential lengthening of lags in Fed policy due to Covid-related factors and the strength of household and corporate balance sheets. Market pricing suggests a low likelihood of a rate hike at the upcoming policy meeting but a close call for the following meeting.