Collins says a somewhat more restrictive Fed rate will help inflation return to target
The Boston Fed president's comments follow the central bank's first rate hike since 2023.
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Chart: Fed target rate, top of the range
UpdateTuesday, September 22, 2026 at 9:45 AM ET
Collins now says the odds have risen of inflation staying notably above the Fed's 2% target, sharpening her earlier call for a somewhat more restrictive rate. Chicago Fed President Austan Goolsbee said the Fed's current projections may not be enough if inflation proves demand driven, though he added a rate hike would not reverse cuts made in 2025. Gold held near $4,375 on Sunday as traders weighed the Fed's next move.
UpdateTuesday, September 22, 2026 at 9:45 AM ET
Chicago Fed President Goolsbee says the Fed's own projections may not be enough if inflation turns out to be demand-driven, though he has also said last week's hike would not reverse the rate cuts made in 2025. Fed Vice Chair Musalem has said the central bank likely needs more rate increases to curb inflation.
Boston Fed President Susan Collins says a somewhat more restrictive federal funds rate will help ensure inflation durably returns to target.
Collins says persistent inflation and renewed conflict in the Middle East supported her vote for last week's quarter-point increase, the Federal Reserve's first rate hike since 2023.
Other officials have pointed to similar pressures. Fed Vice Chair Musalem says business contacts are planning price increases near 3%, even after stripping out supply-side pressures, and has warned inflation could stay well above the Fed's 2% target without further policy restraint.
Collins' call for a somewhat more restrictive stance aligns with what Musalem and others have already signaled. But the word "somewhat" points to a measured approach rather than aggressive tightening. With Fed officials divided on how much more restraint inflation requires, and markets pricing in potential rate cuts next year, Collins' remarks read as staking out middle ground rather than a shift in policy.