Another Fed official wants to keep interest rates unchanged

On November 12, Boston Fed President Susan Collins expressed a cautious stance, saying the Federal Reserve should keep interest rates at their current level for the time being—especially given the lack of economic data caused by the government shutdown and persistently high inflation.

“I see many reasons to set a relatively high bar for further easing in the near term,” Collins emphasized in a speech delivered in the Boston area. “Maintaining rates at their current level for some time would be appropriate to balance the risks to inflation and employment in this highly uncertain environment.”

Collins’s remarks are noteworthy because she is a voting member of the Federal Open Market Committee (FOMC), the body that determines the Fed’s interest rate policy. Her comments place her among the “hawks” in the ongoing debate over rates, highlighting divisions within the committee.

This internal split prompted Chair Jerome Powell to state in October that a rate cut at the December meeting was not guaranteed, despite markets pricing in a high likelihood of such a move.

Although Collins supported a 0.25 percentage point rate cut at the October meeting, she warned that additional easing could hinder the Fed’s efforts to bring inflation back to its 2% target.

“Providing further monetary support to economic activity risks slowing—or even stalling—the process of returning inflation to target,” she explained. “And with demand still solid, the risks to employment, though present, do not appear to have increased since the summer.”

Collins also underscored the impact of the government shutdown on the Fed’s decision-making process. While the crisis now appears to be over, the White House has said key reports on October inflation and employment may never be released.

“In the absence of clear evidence of a significant weakening in the labor market, I would be hesitant to ease policy further—particularly given the limited information on inflation due to the government shutdown,” Collins said.

At the October meeting, the FOMC voted 10–2 in favor of a rate cut. Governor Stephen Miran dissented in favor of a larger cut, while Kansas City Fed President Jeffrey Schmid opposed the move, preferring to keep rates unchanged.

Collins’s remarks suggest that a cautious approach is increasingly gaining ground within the Fed ahead of its final meeting of the year in December.