- Fed should ‘allow time’ when making monetary policy choices
- Too soon to say inflation sustainably moving back back to target
- Fed must balance lowering inflation against slowing economy too much
- Fed can likely achieve goals without causing notable economic pain
- Still too much job market demand
- Wage growth remains elevated
- Core services inflation moderation has been modest
- Expects economy to slow into end of year
Collins said now is the time to be patient and deliberate with policy. There’s a sense of unanimity at the Fed to hold off on hiking in September but to consider hiking later if inflation stays high. The Nov 1 meeting is showing a 40% chance of a hike.
Key passage:
The risk of inflation staying higher for longer must now be weighed against the
risk that an overly restrictive stance of monetary policy will lead to a greater slowdown in
activity than is needed to restore price stability. This context calls for a patient and
careful, but deliberate, approach to policy, allowing time to assess the effects of policy
actions to date, and then acting appropriately. Importantly, patience does not mean
indecision, or a change in the commitment to the 2 percent target, but rather time to
ensure that the economy is on a clear trajectory to achieve price stability.