Federal Reserve official Susan Collins said the U.S. central bank should remain cautious on monetary policy as inflation continues to pose a risk.
Collins said maintaining the current policy rate will require continued evidence that inflation is sustainably moving toward the Fed’s 2% target. She noted that the current policy stance is already mildly restrictive, but warned that stronger action could be needed if disinflation fails to continue.
She also described the labor market as broadly balanced, while highlighting risks from slower immigration and an aging population.
Collins said she still expects gradual disinflation to be the most likely outcome, particularly if additional tariffs remain limited and conditions around the Strait of Hormuz improve.
Her comments suggest the Fed is not ready to rush into interest-rate cuts, keeping markets focused on upcoming inflation and labor-market data.
