BofA warns Fed risks policy mistake with early rate cuts
Investing.com -- Boston Federal Reserve President Susan Collins said Friday that risks to the U.S. economy have come into "rough balance" as officials prepare for Fed Chair Jerome Powell’s Jackson Hole speech.
Speaking on Bloomberg TV, Collins described the current economic landscape as a "complicated context" for monetary policy, noting that while growth has been slowing recently, "overall economic fundamentals are relatively solid."
Collins emphasized the importance of considering all economic factors when making policy decisions. "This is a time where you need to be looking at the balance. You need to be looking at all of it," she said, adding that policymakers "cannot wait until all of the uncertainty is behind us."
On inflation, Collins expressed confidence in the downward trajectory toward price stability but acknowledged it remains a top concern she hears from the public. She stressed the Fed’s dual mandate requires "balancing that commitment to restoring price stability, with an understanding that preserving healthy labor markets matters."
Collins indicated she believes the current policy stance is appropriate but signaled openness to adjusting course if conditions change. "If we start to see worsening labor market risks relative to inflation, starting to dial back the restrictiveness would become appropriate," she said.
Her comments come as market participants await Powell’s speech at the annual Jackson Hole economic symposium, where the frameworks review is expected to be discussed.
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