Fed's Collins Warns Inflation Could Stay 'Notably' Above Target After Backing Rate Move

Boston Federal Reserve President Susan Collins said there is 'an increased likelihood' that inflation will remain 'notably' above the Federal Reserve's 2% target, according to CNBC.

Collins' remarks come after she backed a recent interest rate move by the central bank's policymaking committee, signaling that officials remain focused on balancing the goal of controlling inflation against other considerations, such as labor market conditions, as they set monetary policy.

The Federal Reserve has targeted 2% annual inflation as its benchmark for price stability for over a decade. Persistent deviations above that target have been a central focus of the central bank's policy discussions in recent years, following a period of elevated inflation that prompted a series of interest rate increases.

As a voting member of the Federal Open Market Committee in certain years, regional Fed presidents like Collins play a role in shaping the consensus around the central bank's benchmark interest rate decisions. Her comments reflect an assessment shared by some Fed officials that inflationary pressures may prove more persistent than earlier projections suggested.

Further specifics on the timeframe Collins expects elevated inflation to persist, or the factors she cited as driving that outlook, were not detailed in the available reporting.