By Howard Schneider <\/p>\n
WASHINGTON, Aug 25 (Reuters) – The U.S. Federal Reserve will need to raise interest rates soon unless coming data show a continued decline in \u200cinflation that remains too high and which has become a “pervasive” concern for businesses \u200cand households, Boston Fed President Susan Collins said on Tuesday. <\/p>\n
Collins said in comments posted to the Boston Fed website \u200bthat the current Fed policy rate, under her base case outlook, will continue to push down prices and help with a “gradual disinflation” aided also by the recent rise in longer-term bond yields and other factors. <\/p>\n
But “should evidence of sustained inflation progress not materialize, I believe it will \u200cbe appropriate to tighten policy soon \u2060to ensure we deliver price stability in a reasonable time frame. … Concerns about high prices are pervasive in my conversations with stakeholders across \u2060New England,” Collins wrote. <\/p>\n
Economists polled by Reuters expect that new inflation data on Wednesday will show that the Personal Consumption Expenditures price index, excluding food and energy, increased at a 3.3% annual \u200brate \u200bin July, unchanged from the month before and \u200bwell above the Fed’s 2% target. \u200cCore PCE, considered a guide to future headline inflation, has risen steadily since last year, with Fed officials citing the Trump administration’s import tariffs, higher oil prices due to the war with Iran, and now massive investments in artificial intelligence as reasons for the increase. <\/p>\n
The Fed’s policy rate, currently in the 3.5% to 3.75% range, has been on hold since \u200cDecember as officials waited for inflation to ease. <\/p>\n
Collins said \u200bshe still thinks that may happen, but, with \u200binflation above target for more than five years \u200bnow, she also said the Fed cannot wait forever, and is \u200cconcerned that further time missing the inflation \u200bgoal could shift consumer \u200bexpectations in a way that makes the inflation goal harder to achieve. <\/p>\n
Fed Chairman Kevin Warsh speaks on Thursday in a much-anticipated keynote address to the central bank’s \u200bannual research symposium in Jackson \u200cHole, Wyoming, remarks that come amid division on the Fed about the need \u200bfor rate hikes, and a rise in U.S. Treasury yields. <\/p>\n
(Reporting by Howard \u200bSchneider; Editing by Chizu Nomiyama and Mark Porter) <\/p>\n","protected":false},"excerpt":{"rendered":"By Howard Schneider WASHINGTON, Aug 25 (Reuters) – The U.S. Federal Reserve will need to raise interest rates…\n","protected":false},"author":3,"featured_media":1023747,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":"","_share_on_mastodon":"0"},"categories":[12],"tags":[409562,64,79,26049,409563,17001,16537,85424,67,132,68],"class_list":["post-1023746","post","type-post","status-publish","format-standard","has-post-thumbnail","category-economy","tag-boston-fed","tag-business","tag-economy","tag-headline-inflation","tag-inflation-goal","tag-inflation-data","tag-susan-collins","tag-u-s-federal-reserve","tag-united-states","tag-unitedstates","tag-us"],"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@us\/117157909505807527","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/1023746","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/comments?post=1023746"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/posts\/1023746\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media\/1023747"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/media?parent=1023746"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/categories?post=1023746"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/us\/wp-json\/wp\/v2\/tags?post=1023746"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}