Fed's Collins sees another rate hike on the table before end of 2026
TLT•Boston Fed President Susan Collins expects another rate increase before the end of 2026, after the Fed raised its policy rate to 3.75%-4.00% last month. She said the timing will depend on incoming data.
1. Further hike expected
Collins said she currently expects it will be appropriate to raise rates further before year-end to return inflation to the Fed's 2% target. She backed last month's quarter-point increase, which brought the policy rate to 3.75%-4.00%.
2. Inflation risks remain
Collins said the most likely outlook features healthy GDP growth and a labor market near full employment, with inflation gradually returning to 2%. She expects total and core inflation to remain above target in the coming months, citing higher refined energy prices; AI infrastructure investment, tariffs and energy costs tied to the war in the Middle East could also complicate efforts to lower inflation.
