Federal Reserve’s Collins: Patience with rising inflation is waning, and interest rates may need to remain higher for longer

Odaily Planet Daily News Federal Reserve’s Collins said on Wednesday that she expects interest rates to remain stable for an extended period and believes that in some 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 been above the target level for more than five consecutive years, she believes patience in suppressing price increases is currently waning. Collins stated that the current tight monetary policy "may need to last for some time." She pointed out: "The shock has slightly increased the downside risks to economic activity, while the upside risks to inflation have further increased." At the same time, she also said that if inflation declines, the Federal Reserve could still continue to cut interest rates later this year. Collins added, however, that if the conflict persists and leads to further price increases, "I can envision a scenario where tightening policies would be needed to ensure inflation sustainably returns to 2% within a reasonable timeframe." (Jin Shi)