In the “To Cut or Not To Cut” debate, it seems the Fed is indicating rates will stay higher for longer. Wednesday Boston Fed president Susan Collins stated it will take longer “than previously thought” to bring down inflation. She believes that slower economic growth will be needed to cool inflation, as one can no longer rely on improvements in supply chains. She echoes other Fed officials who have also favored holding rates at current levels for longer. New York Fed president John Williams stated Monday that “policy is in a very good place, and we have time to collect more data, so steady as she goes.”
Minneapolis Fed president Neel Kashkari said Tuesday he believed rates would be held at current levels and didn’t rule out a hike if inflation stalls near 3%.