US FOMC Member Collins Speaks

Takeaways: 1. As we begin the new year, “the economy is in a good place overall.” “Inflation is down significantly from its 2022 peak,” and data continue to point to a gradual, if uneven, trajectory back to the Fed’s 2 percent target. This has been accomplished with a labor market that has stayed healthy “as unsustainably hot job-market conditions from two years ago cooled in an orderly way.” 2. By describing the economy as in a good place overall, Collins is not declaring victory – and in fact sees “considerable uncertainty accompanying my baseline outlook.” “While inflation is down significantly, it is still above target; and its decline has been slower and bumpier” than anticipated. Collins described multiple types of uncertainty – including “noisy” measurement of key economic variables, unusual features of the post-pandemic economy, and possible future policy changes and geopolitical developments. post: BOSTON FED'S COLLINS/NAIOP: LESS WORRIED NOW ABOUT JOBS MKT FRAGILITY; BROADLY AGREE WITH S.E.P. OUTLOOK ON TWO 2025 RATE CUTS #Collins #FederalReserve #economy post: BOSTON FED'S COLLINS/NAIOP: RESTRICTIVE POLICY STANCE STILL NEEDED; 2025 INFLATION TO RUN 'SOMEWHAT HIGHER' THAN ORIGINALLY THOUGHT #Collins #FederalReserve #economy post: BOSTON FED'S COLLINS/NAIOP: 'NO PRESET PATH' FOR POLICY; FED WELL POSITIONED TO ADJUST TO WHATEVER NEEDS TO BE DONE; NEED 'GRADUALISM' #Collins #FederalReserve #economy

Thank you, Dean Watkins-Hayes – Celeste – for such a warm welcome, or I should say, welcome back. Michigan’s Ford School is truly a special place, and it has been wonderful to be back on campus, here in Weill Hall, spending time with students, faculty and staff, including some dear friends, as well as many new faces. I have enjoyed learning about the exciting new developments and initiatives underway – and am thrilled, but not at all surprised, to see the Ford School continuing to thrive. So, thank you for hosting me – it is a pleasure to be here with you. Today, I’d like to share my perspectives on the U.S. economy and monetary policy, focusing more on where we are than how we got here, and offering some thoughts looking ahead. I also know that the Federal Reserve is a bit of a mystery to many people. So, I’ll take the opportunity, at the end of my remarks, to talk briefly about the Fed itself, and, focusing on the Boston Fed, will give some examples of the breadth of work we do in support of our mission and our mandate from Congress. Then, I look forward to your questions. post: Federal Reserve Bank of Boston President Susan Collins said more interest-rate cuts are needed, but policymakers should proceed carefully to avoid moving too quickly or too slowly. https://t.co/bgwdzasgYk

post: FED’S COLLINS: DOESN’T WANT TO CUT RATES TOO QUICKLY post: FED’S COLLINS: SOME ADDITIONAL RATE CUTS ARE NEEDED AS POLICY IS STILL RESTRICTIVE. post: FED’S COLLINS: FINAL DESTINATION OF RATE CUTS IS UNCLEAR post: FED’S COLLINS: ANY FURTHER SLOWDOWN IN JOB MARKET IS UNDESIRABLE. post: FED’S COLLINS: RISKS TO THE OUTLOOK ARE ROUGHLY IN BALANCE.

Good morning. It is a pleasure to welcome everyone participating in this conference, and those viewing the livestream. This is the Boston Fed’s 68th Economic Conference, and, per tradition, we’ve organized it to feature expert analysis and engaged discussion around a topic with realworld implications and relevance to economic vibrancy and the financial system on which we all rely. I would like to thank Egon Zakrajsek, our Director of Research, and his team for organizing another special conference. My thanks also to those presenting research and insights today and tomorrow, as well as to the discussants and moderators. I’ll be brief in these introductory comments; but first, my standard disclaimer: The views I express are my own and may not reflect views of other Federal Reserve policymakers. Our goal for the next day and a half is post: FED’S COLLINS MAKES NO COMMENT ON MONETARY POLICY, ECONOMIC OUTLOOK

post: BOSTON FED PRESIDENT SUSAN COLLINS: SUPPORTS FURTHER US RATE CUTS