by Finimize Newsroom
Finimize
What’s going on here?
Boston Federal Reserve President Susan Collins hinted at upcoming interest rate cuts, aiming to trim inflation without shaking up the labor market.
What does this mean?
Susan Collins is confident the US central bank can reduce inflation without causing a recession. She supports starting rate cuts next month but emphasizes the need to maintain a healthy job market. The Fed hasn’t changed its policy rate, currently in the 5.25%–5.50% range, since last July. Inflation, measured by the Fed’s preferred gauge, was at 2.5% in July – above the 2% target but much lower than the 7% peak seen two years ago. Collins advocates for a ‘gradual, methodical’ policy adjustment to avoid a rapid cooling of the labor market, which could lead to an economic decline.