Federal Reserve Bank of Boston leader Susan Collins said that with little evidence price pressures are waning, the Fed may need to deliver another 75-basis point rate hike as it seeks to get inflation under control.
"We're now in a phase where deliberate increments - all of the possible increments - should be on the table as we decide what is sufficiently tight," Collins told CNBC. "Seventy-five still is on the table; I think it's important to say that as well."
The Fed has lifted its policy rate more rapidly this year than any time since the 1980s, including four straight 75-basis-point increases that by early this month had brought short-term borrowing costs to a 3.75%-4% range, from near zero in March.
Collins said Friday that the Fed's September projections for rates was a "reasonable range." Collins said Fed rate rises this year have been swift and had put monetary policy in a "different phase." But with questions rising over the stopping point for those increases, Collins said “I won’t give you a number.” She said it was important that whatever the Fed does, it not engage in a cycle of moving and holding rates--stop and go, in her description--as that strategy has worse outcomes lowering inflation.
In her television interview, Collins said "I would say that some of the data that we've seen since then has increased at the top of where I think we might need to go." Fed policymakers will issue new forecasts in December, and "there will be new data between now and then so that will influence my own thinking."
