MNI: Collins Says Fed At, Or Near, Point of Rate Pause

Boston Fed President Susan Collins said Thursday the central bank may be at or approaching a pause in its rate-hiking cycle, but said there is still time to fully assess the impact of the actions taken to date and the general tightening of credit conditions on economic activity before the June 13-14 FOMC meeting.

"While inflation is still too high, there are some promising signs of moderation. I believe we may be at, or near, the point where monetary policy can pause raising interest rates," she said in prepared remarks.

Collins stressed the need to "make each policy decision based on a wholistic assessment of information available at the time." Until the next FOMC meeting in mid-June, "we continue to monitor a wide range of data – about price developments, labor markets, financial conditions and more – to evaluate how the economy is doing," she told students at the Community College of Rhode Island.

Fed officials have appeared divided on a June hike or pause while others have suggested a potential skip to a July hike. (See: MNI INTERVIEW: Fed Seen Pausing In June, Could Restart-Acharya)

Since March 2022, the Fed has raised rates from near zero to just over 5%. "Recent stresses in the banking system are likely to further tighten credit conditions for businesses and consumers, also cooling demand," Collins said.