Susan Collins, president and chief executive officer of the Boston Fed, speaks to Bloomberg TV during the Kansas City Fed’s Jackson Hole Economic Policy Symposium on Friday, August 22, 2025 in Moran, Wyoming.
David Paul Morris | Bloomberg | Getty Images
Boston Fed President Susan Collins said Wednesday that she is reluctant to support further rate cuts for now because inflation remains high and policymakers are hampered by a lack of data due to the government shutdown.
“Given my fundamental outlook, it would be appropriate to keep interest rates at current levels for some time to balance inflation and employment risks in this highly uncertain environment,” central bank officials said in a local speech. “I think there are several reasons why the bar for further easing is relatively high in the short term.”
Collins’ comments are noteworthy because he is a voting member of the Federal Open Market Committee, which sets interest rates. His comments pushed him to the hawkish side of the interest rate debate and highlighted a rift among the committee members, with Chairman Jerome Powell saying in October that a rate cut at the December meeting was not a foregone conclusion, despite market prices being likely.
Collins supported a quarter-point rate cut at the October meeting, but suggested further easing could hamper the Fed’s efforts to lower inflation.
Collins said the weakness in the labor market “needs to be watched closely,” but added that the risk of inflation staying above the Fed’s 2% target requires vigilance.
“Against this backdrop, providing additional financial support to economic activity risks delaying, or even stalling, the return to target inflation.” “While there are downside risks to employment as demand remains strong, it does not appear to have increased further since the summer.”
Collins also addressed the role the government shutdown has played in his decision-making. The impasse appears to be over, but the White House press secretary said Wednesday that key reports on inflation and employment may not be available at all in October.
“Absent evidence of a significant deterioration in the labor market, we would be hesitant to ease policy further, especially given the government shutdown and limited information on inflation,” Collins said.
The FOMC in October voted 10-2 in favor of a rate cut. Governor Stephen Milan voted against it because he wanted a big rate cut, while Kansas City Fed President Jeffrey Schmidt voted against it because he supported no rate cuts.
