Fed's Collins: Patience on inflation is waning, 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 an extended period and believes that in some scenarios, further tightening may be needed 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 remained above target for more than five consecutive years, she believes 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 adding to the upside risks for inflation." At the same time, she indicated that if inflation eases, the Fed may still continue to cut interest rates later this year. Collins added, however, that if conflicts persist and drive prices higher, "I can envision a scenario where tightening would be necessary to ensure inflation sustainably returns to 2% within a reasonable timeframe." (Jinshi)