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Collins: "More Work To Do", "May Be Near A Place Where We Can Hold"


Boston Fed Pres Collins tells Yahoo Finance at Jackson Hole that while she is seeing "promising signs" that the Fed's past work "is starting to have its desired effects", "I think that there is more work to do". Her comments overall come off as relatively hawkish given her previous dovish reputation.

  • She is not sure where the peak rate is, and doesn't see it as helpful to lay out a preset rate path, with "additional increments" (ie rate hikes) potentially being required and "we may be very near a place where we can hold for a substantial amount of time", with the Fed needing to remain "patient" and "resolute".
  • On housing, it's "going to take time to get to a place where there's more affordable housing, where prices are not as challenging for many" but "new housing sales are robust which suggests that people are managing with the higher mortgage rates and the inventory is extremely low."
  • On higher market interest rates: It's helpful that the higher longer rates are consistent with an understanding that this is going to take some time.
  • On potential rate cuts in 2024: The last SEP had, by the end of 2024, some decline in rates - the timing of that, it would be too premature to give some kind of concrete signal. It will take some time, people should not be surprised about that. We haven't really seen growth slow down orderly to trend that's consistent with being a realistic optimist.
  • The last time we heard from her at any length on monetary policy was May 25 ahead of the June meeting where the Fed held at 5.00-5.25% when she said "I believe we may be at, or near, the point where monetary policy can pause raising interest rates.” Since then they've hiked once more (July). In a two-liner with the WSJ last week she said "I think we are near or at a reasonable place to peak".

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