Collins: “Inflation Rising… Inevitable to Maintain 2% Target”,
Federal Reserve Building in the U.S. Photo=REUTERS,
, ‘Boston Federal Reserve Bank President Collins said that the current interest rates, which are at their highest level in 20 years, would need to be maintained longer than expected.’,
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, ‘He assessed that the progress in addressing disinflation (slowing price increases) this year is inadequate, and pointed out that an economic slowdown is necessary to maintain the inflation target of 2%.’,
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, ‘According to Bloomberg, President Collins said during a speech at the Massachusetts Institute of Technology (MIT) on the 8th (local time), “the recent upward trend in economic activity and inflation suggests the need to maintain monetary policy at its current level.”‘,
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, ‘He further stated, “Until we have more confidence that inflation is moving toward 2%, we need to maintain monetary policy, but based on recent indicators, I think it will take longer than previously thought.” However, he did not specify a concrete time for a potential rate cut.’,
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, “President Collins’ remarks echo Federal Reserve Chair Jerome Powell’s statement that there is still work to be done to gain confidence that inflation is moving toward the 2% target before considering a rate cut.”,
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, ‘Powell emphasized that it is not surprising that there are issues in the disinflation process, such as no progress in first-quarter inflation, and stated, “Given that the current situation will take time to show progress and will not continue to be smooth, prudent and systematic patience is necessary.”‘,
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, ‘He went on to say, “Maintaining this restrictive level for a longer period will slow down the economy,” and added, “There is a need to suppress demand to further weaken core service inflation excluding housing.”‘,
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, ‘Regarding current policies, he evaluated them as “reasonably restrictive” and said, “They have become much more restrictive recently than expected and have not yet had a complete impact.”‘,
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