Fed's Collins: Patience on inflation growth is waning, interest rates may need to stay higher for longer

Odaily Planet Daily News Fed's Collins said on Wednesday that she expects interest rates to remain steady for a prolonged period and believes that in certain scenarios, further tightening may be necessary to ensure inflation returns to the 2% target. She noted that traditional monetary policy typically "ignores" sudden supply shocks, such as rising oil prices. However, given that inflation has exceeded target levels for over five consecutive years, she believes current patience in curbing price increases is waning. Collins stated that the current relatively tight monetary policy "may need to persist for some time." She pointed out: "Shocks have slightly increased the downside risks to economic activity, while further amplifying upside inflation risks." At the same time, she also indicated that if inflation eases, the Fed could still proceed with rate cuts later this year. Collins added, however, that if conflicts persist and lead to further price increases, "I could envision a scenario where tightening is needed to ensure inflation sustainably returns to 2% within a reasonable timeframe." (Jin Shi)