Boston Fed President Backed Last Week's Rate Hike, Citing Risks of Sticky Inflation

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Boston Federal Reserve President Collins said on the 22nd that she supported last week's rate hike, given the risk that future inflation will run above the Fed's 2% target. In a post on the social networking site LinkedIn, Collins said she sees a growing likelihood of a scenario in which inflation remains significantly above 2%, and noted that with the labor market on firmer footing, monetary policy can focus on a timely return to price stability. She added that a somewhat restrictive federal funds rate will help ensure inflation returns sustainably to target.

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Effective Federal Funds Rate
EFFR
▲ PositiveMonetaryrelevance

Boston Fed President Collins backed last week's rate hike, signaling a somewhat restrictive fed funds rate to bring inflation back to target.

United States Government Bond 10Y
US-10Y
▲ PositiveMonetaryrelevance

Collins' support for a restrictive policy rate and sticky-inflation concerns imply higher expected policy rates, pushing the 10Y Treasury yield up.