Boston Fed President Susan Collins Talks September Rate Decision
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What is the main topic discussed in this episode?
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Joining us now, Boston Fred President Susan Collins, who has been in this meeting and coming here for, what, 20 years, 20-some-odd years? Absolutely. This one feels different, doesn't it?
Well, there's a lot going on with this meeting, I will say, and delighted to be here with you. The Framework Review, which we will hear more about, very complicated context, obviously, and I'd love to tell you a little bit about how I'm seeing economic conditions in the outlooks.
So let's get into that. There is this dual mandate that's in question, the idea of inflation versus labor. Where are you in the continuum of which you need to be most worried about?
Well, this is a time when you need to be looking at the balance. You need to be looking at all of it. And, you know, growth has been slowing recently. But at the same time, overall economic fundamentals are relatively solid. And that's a context in which it's not surprising to see the indicators being mixed. Some are stronger and some are a bit weaker. So you've got to look at the whole picture and not focus too much on any one or two specific indicators.
There's a lot of people who are concerned that you might be late getting to the economy if you wait for unemployment to rise significantly. On the other hand, you might see inflation rise fast. What about the compromise that's been floated by some people that you cut rate once and then you wait?
Well, so you do have to be thinking about all of it. We cannot wait until all of the uncertainty is behind us. You've got to make decisions in real time. So I think that part is true. It is a complex context for monetary policy because I see upside risks to inflation related to tariffs. We're already starting to see some of that and downside risks. on the labor market side. And so it's about balancing those features. And I don't get ahead of a decision that we're going to make four weeks from now. We're going to see data in between now and then. But it's going to be about balancing those to really offset our risks and focus on both sides of that mandate.
Well, I know data is important, but it's also backward looking. So what are companies in your district telling you about their plans for both employment and prices?
Yeah, absolutely. Because I do think that complementing all of the statistical analysis that we are always, you know, I'm a total data geek, right? You got to be in this role. with what we're hearing is really important. And what I'm hearing is pretty consistent with what I'm seeing in the data, actually. And so on the labor market side, while the job growth has certainly slowed, it's somewhat more concentrated, at the same time, a number of those indicators are quite healthy.
What insights does Susan Collins provide on the September rate decision?
And so on that side of it, I think that there are arguments for taking a bit more time but I'm very focused on how those downside risks are evolving. And then on the inflation side, what I'm hearing is that early days in terms of the impact of tariffs coming through into prices over time for a number of different reasons. So what I'm hearing from firms around my district, which is most of New England, and what we're seeing in the data as we do that analysis at the Boston Fed are pretty much telling a similar story from that context.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–3:36
2
What insights does Susan Collins provide on the September rate decision?
3:36–6:28
3
How does Susan Collins view the balance between inflation and labor concerns?
6:28–8:16
4
What are the current economic fundamentals according to Susan Collins?
8:16–9:48
5
What are the risks associated with monetary policy decisions?
9:48–11:10
Speakers
4 identifiedMore from Bloomberg Talks
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