Susan Collins, president of the Federal Reserve (the US central bank), said in Boston on Tuesday that she believes the bank will have to raise interest rates again before the end of this year to curb high inflation.
Collins explained that she supported the decision to raise interest rates made last month by the Federal Open Market Committee, the committee responsible for setting the central bank's monetary policy, and now believes it would be appropriate to raise interest rates slightly before the end of the year to ensure that inflation returns in a timely and permanent manner to the committee's target of two percent.
In the text of a speech she will deliver at a banking conference at the Federal Reserve Bank of Boston, she said, “My opinion as to the need for further policy action, and the appropriate timing for it, will depend heavily on how the incoming data as a whole shapes my expectations and balances the associated risks.”
She added that with the economy and labor market performing well, the Federal Reserve could focus its efforts on bringing inflation back to its target level after failing to achieve this goal for more than five years.
The Federal Reserve raised the interest rate by a quarter of a percentage point to a range of 3.75 percent - 4.00 percent last month.
Policymakers' projections released at that meeting point to another increase by the end of 2026, although a number of Federal Reserve officials have strongly suggested in the past few weeks that this move will come in December and not at the October 27-28 meeting.
