Boston Fed Chairman Collins reiterated his view that options are open for rate hikes at the Federal Open Market Committee (FOMC) meeting in December. 0.75 point is possible.
The governor also reiterated that further rate hikes are needed to keep inflation in check. He said his perception of how much rates need to be raised hasn’t been influenced by recent economic data.
“We’re starting to see some encouraging signs,” Collins said in an interview with CNBC Wednesday, but added, “At the moment, there is clear and consistent evidence that overall inflation is coming down.” “We still have work to do,” she said.
He said he had not yet made a decision on how much to raise interest rates at the December FOMC meeting. Collins will have voting rights at this year’s FOMC meeting.
“Historically, 50 (basis points, bp) has been seen as a significant rate hike,” he said, adding that monetary policy is currently in the range that most people consider to be in “tightening” territory. “But 75 is still an option. I think it’s important to point that out,” she said.
The US consumer price index (CPI), released on Wednesday, showed inflation easing more-than-expected in October.
US CPI headline and core growth lower than expected – room for slower rate hikes (3)
Collins speaks at a conference hosted by the Federal Reserve Bank of Boston before the CNBC interview. “I think it will be necessary to raise the federal funds (FF) rate further and then keep it at a sufficiently suppressive level for some time,” she said. “The most recent data hasn’t weakened my perception of what depressed enough means, nor my resolve,” she said.
Original title:Collins says the Fed has other things to do, undecided on the size of the rate hike(extract)
(Updates with observations from the CNBC interview)
