Boston Fed President Collins Says Rates May Need to Be 'Slightly Restrictive' for a Period

12:36 PM EDT, 05/13/2026 (MT Newswires) -- Given the elevated pace of inflation, it may be necessary to hold the federal funds rate at its current level for a period of time, or possibly move higher, Boston Federal Reserve Bank President Susan Collins said Wednesday at the Boston Economic Club.

Collins made her comments after the release of April producer price data earlier in the day that showed the strongest year-over-year pace of growth in over three years.

"It will likely be necessary to maintain the current, slightly restrictive monetary policy stance for some time," Collins said. "More than five years of above-target inflation has reduced my patience for 'looking through' another supply shock."

Some Fed officials have suggested that the recent price jump, led by an energy price spike that resulted from the Middle East conflict, was only temporary and should be ignored, but others have cautioned that rates should not be lowered in the current environment and some have suggested that the next move should be higher.

"While I hope policy normalization can resume late this year, I can also envision a scenario that requires some policy tightening to ensure that inflation returns durably to 2%," Collins said.

Currently, the CME's Fed Watch tool looks for a 38% chance of higher rates being priced by the end of 2026, compared with 0.9% that see lower rates.

Collins next votes on the Federal Open Market Committee in 2028.

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