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Investing.com -- Federal Reserve Bank of Boston President Susan Collins expressed support for additional interest rate cuts this year, citing increased risks to the job market amid a more contained inflation outlook.
Speaking at an event in Boston on Tuesday, Collins stated that "it seems prudent to normalize policy a bit further this year to support the labor market" given the current economic conditions.
Collins emphasized that even with further rate cuts, monetary policy would remain "mildly restrictive," which she considers "appropriate for ensuring that inflation resumes its decline once tariff effects filter through the economy."
Despite her support for easing, Collins stressed that policy is not predetermined. "I can envision scenarios where appropriate policy calls for holding rates steady later this year and into next, as we assess effects of the recent policy actions and get more information," she said.
Looking ahead, Collins described her economic outlook as "relatively benign," anticipating continued growth, a small increase in unemployment, and inflation that should moderate next year as tariff impacts work through the economy.
Nevertheless, she acknowledged ongoing uncertainty, noting she does "not rule out scenarios featuring higher and more persistent inflation, more adverse labor market developments, or both."