Fed Collins: Keeping the Intrerest Rate unchanged for a period may be the appropriate approach.

[Fed official Collins: Keeping interest rates unchanged for a period of time may be the appropriate course of action] This year's FOMC voting member, Boston Fed President Collins, said on Wednesday that she believes the threshold for further rate cuts in the short term is “relatively high,” due to concerns about inflation remaining elevated. Collins voted in favor of a rate cut last month. “Unless there are clear signs of a significant deterioration in the labor market, I will remain cautious about further easing, especially in the context of limited inflation data due to the government shutdown… In the current highly uncertain environment, maintaining the policy interest rate at its current level for a period of time may be the appropriate course of action in order to balance inflation and employment risks.” Her remarks highlight the deep divisions within the Fed. Since the last rate cut, several voting and non-voting Fed officials, including Collins, have signaled increasing caution about further cuts. Collins believes that short-term borrowing costs are currently in a “mildly restrictive” range, while the overall financial environment remains supportive of economic growth. The labor market has indeed shown signs of slowing, but the downside risks have not intensified since the summer.