MNI BRIEF: Collins Sees 'Additional' Fed Cuts, Data-Based
Boston Fed President wants to keep the economy more or less where it is now.
Federal Reserve Bank of Boston President Susan Collins said Wednesday she sees a series of interest-rate decreases ahead as the central bank eases off of restrictive monetary policy, adding she would like to keep the U.S. economy and labor market roughly where they are today.
"Preserving the current favorable economic conditions will require additional adjustment to the stance of monetary policy, so as to not place unnecessary restraint on demand," she said in prepared remarks to the Worcester Regional Research Bureau. "The recent data, including September’s unexpectedly robust jobs report, bolster my assessment that the labor market remains in a good place overall – neither too hot nor too cold,"
The Boston Fed chief said recent data revisions not only raised the level of GDP and pointed to lower employment but also suggest that productivity may be understated by current measures.
"Going forward, it will be vitally important to preserve healthy labor market conditions. In my view, this will require economic activity continuing to grow close to trend, which is my baseline outlook." (See: MNI: Job Boom Means Slower Fed Cuts, Pause Possible - Ex-Staff)