Federal Reserve Collins: Changes in inflation outlook prompt it to support rate cuts

Collins, the president of the Boston Fed, said on Monday that changes in the outlook for inflation made her inclined to support the Fed's decision to cut interest rates last week. "I support last week's decision by the FOMC to lower the target range for the federal funds rate by 25 basis points, although this is a difficult decision for me," Collins said in a statement. "The information available suggests a slight shift in the balance of risks and a scenario of a significant further rise in inflation appears less likely." Before the Fed meeting, Collins had suggested that her concerns about inflation could put her on the side of opposing a rate cut. She has been concerned about the issue of inflation being too high and persisting well beyond the Fed's target. However, Ms Collins' unexpectedly dovish stance did not translate into a new outlook for monetary policy. "It is important to me that the forward guidance in the Committee's statement is consistent with the language of the December 2024 statement, when the rate cut process was suspended following the statement," she said.