By Sam Boughedda
Federal Reserve Bank of Boston President Susan M. Collins said she was leaning towards a quarter-point interest rate hike at the next central bank meeting, in an interview with the New York Times today.
A possible quarter-point rate hike would represent a slowdown and a move towards a normal pace in monetary policy, after a year of aggressive hikes to control runaway inflation.
There have recently been four consecutive three-quarter-point adjustments, but the Federal Reserve came through in December with a half-point increase.
In recent days, a few regional Fed chairs have hinted that an even weaker adjustment may be possible when the Fed makes its next move on Feb. 1.
Ms Collins said in the NYT interview that she thinks ’25 or 50 would be reasonable’ and that she would ‘lean towards 25 at this point, but a lot depends on the data’.
She adds that adjusting slowly “gives more time to assess incoming data” before making each decision. “Small changes give us more flexibility,” Ms Collins said.
Ms. Collins is one of the Central Bank’s 12 regional presidents and one of 19 monetary policy officers. However, she does not have a formal vote on rate changes this year, but she will participate in the deliberations.
Nonetheless, Ms Collins said she favors raising interest rates to just above 5% this year.