Boston Fed President COLLINS said she could support a Fed rate increase at the
next meeting if incoming data show DISINFLATION falling short of expectations.
She warned that absent clear evidence of sustained improvement in inflation,
further tightening “soon” could be appropriate; when asked if “soon” meant the
next one or two meetings she replied “possibly, yes.” COLLINS said July’s
inflation report was broadly consistent with her view—core inflation ran
slightly above forecasts, but was more encouraging after excluding several
hard-to-observe items. She still expects inflation to cool gradually even
without additional hikes. Her June projections showed the policy rate staying
unchanged through year-end and she called current policy “mildly restrictive.”
