![]() ![]() ![]() ![]() “And that actually disproportionately affects the most vulnerable.” “Inflation is just clearly too high with rapidly rising prices for necessities, like food, housing and transportation,” she said. Blue-collar workers, especially those at the lower end of the pay ladder, will be hit harder than more-affluent professions.īut Collins argued, like Powell has done repeatedly, that getting prices under control is imperative. The Fed has been criticized by some progressives for being too quick to sacrifice jobs in its fight against inflation. ![]() Ford School of Public Policy before returning to teaching. She arrived at the university in 2007 and served for a decade as dean of its Gerald R. She joined the Boston Fed from the University of Michigan, where she had been provost and executive vice president for academic affairs since 2020. “Moreover, calibrating policy in these circumstances will be complicated by the fact that some effects of monetary policy work with a lag.”Ĭollins, 63, is a Harvard- and MIT-trained economist, and is the first woman of color selected to lead one of the 12 regional Fed branches since the central bank system was created in 1914. “A significant economic or geopolitical event could push our economy into a recession as policy tightens further,” she said. However, she also pointed to risks facing the economy. ”It is quite likely that inflation is near peaking and perhaps may have peaked already,” she said in response to a question from James Rooney, president of the Greater Boston Chamber, who interviewed Collins following her formal remarks. Employers are struggling to find workers, not looking to jettison them, which could limit increases in unemployment. Household and business finances are healthier than they were in previous periods when the Fed was raising rates, she said, so spending might not fall as dramatically. They forecast a bigger rise in the jobless rate, and barely any economic growth this year.Ĭollins is a voting member of the Fed’s rate-setting committee this year, she backed the rate increases approved in July and earlier this month, and said further hikes would be needed.īut in her comments she cited several reasons why a painful recession might be avoided. New economic projections released by Fed policy makers last week were far gloomier than their June outlook. Related : Fed’s outlook darkens as it pushes interest rates higher Inflation is running anywhere from two to three times the Fed’s target, depending on which measure of consumer prices is used. The Fed has raised its benchmark rate this year at the fastest pace since the early 1980s with the aim of bringing demand for goods, services, and workers back in line with supply. a soft landing would be very challenging and we don’t know, no one knows, whether this process will lead to a recession or if so, how significant that recession would be,” Powell said. “We have always understood that restoring price stability while achieving. Powell said the Fed would do whatever is necessary to achieve “price stability” - that is, bring down inflation to its 2 percent goal. In holding on to the possibility of a “soft landing,” Collins struck a slightly more optimistic tone than Fed chair Jerome Powell did last Wednesday after central bank officials approved their third straight supersize rate increase, and indicated additional hikes would come later this year. Collins becomes first woman of color to lead Boston Federal Reserve Bank ![]()
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