Fed's Collins says more rate hikes are coming, reportedly
TLT•Boston Fed President Susan Collins said tighter monetary policy is coming because of high inflation and that a tighter policy path may be appropriate. Markets expected a quarter-point hike in December, with another increase expected in January.
1. Collins favors tighter policy
Susan Collins said additional monetary tightening would be appropriate and that a tighter path may be needed than she expected a couple of months ago, citing recent inflation data and broadening price pressures. She said she did not want to get ahead of how high or how fast rates should rise, and called a careful adjustment her best-case scenario.
2. Rate expectations
The Fed's benchmark rate was in a 3.75%-4.00% range. Traders and investors expected a quarter-percentage-point hike at the December 8-9 meeting, while financial markets also expected another hike in January. Fed Governor Christopher Waller had suggested the possibility of a half-point move.
3. Housing and markets
At a housing conference hosted by her regional Fed bank, Collins said price stability is key to a healthy housing sector, even if tighter policy brings near-term pain. She also said financial markets appeared to be functioning well.
