Boston Federal Reserve Bank (Fed) Bank (Fed), Susan Collins, said on Thursday that the FED challenge at this time is to have to choose between maintaining a strict policy position or trying to advance data that could deteriorate in the future.
Key aspects
I am cautiously and realistically optimistic about the economy.
The economy began 2025 in a good place.
Inflation had decreased but remained elevated at the beginning of the year.
The perspective is now much more uncertain for inflation and growth.
It is inevitable that tariffs increase short -term inflation.
The question remains how long the inflation driven by tariffs will last.
Inflation risks are up.
I firmly supported the Fed decision to keep the rates without changes.
I hope the Fed probably keeps the stable rates for longer given the perspective.
Keeping stable rates for a longer period seems appropriate.
The basic perspective is a unique impact of tariffs on inflation.
If the tariffs continue, there will be a different trajectory in prices.
Observing inflation expectations is important at this time.
Price expectations become more vital with more tariffs.
Federal layoffs remain small in relation to the added size of the labor market.
Economic uncertainty causes companies to retract.
It is too early to say if the data is weakening.
The underlying strengths of the economy are still present.
Fed’s policy needs to be actively patient and flexible.
We do not want to be behind the curve or react.
Source: Fx Street
I am Joshua Winder, a senior-level journalist and editor at World Stock Market. I specialize in covering news related to the stock market and economic trends. With more than 8 years of experience in this field, I have become an expert in financial reporting.
