Corlins: The Federal Reserve may need to raise interest rates to curb inflation

The President of the Boston Federal Reserve Bank, Susan Collins, stated that if inflationary pressures do not subside, the Federal Reserve may need to raise interest rates.

During an event on Wednesday, Collins pointed out that although rate hikes are not the most likely scenario she predicts, a situation can be foreseen where certain policy tightening measures are necessary to ensure that inflation returns to the 2% level in a timely and sustained manner.

Collins said that the outlook for monetary policy from the Federal Open Market Committee (FOMC) largely depends on the duration of the Middle East conflict, and she indicated that the longer the conflict continues, the greater the risk, especially regarding inflation.

She believes that the monetary policy stance is already in a favorable position and can be adjusted based on the evolving outlook and risk balance. Given the current outlook and risk balance, maintaining the current slightly restrictive monetary policy stance for a period may be important; she also added that inflation exceeding the target for more than five years has diminished her patience for the reemergence of supply shocks.