Fed’s Susan Collins
Fed should ‘allow time’ when making monetary policy choices
Too soon to say inflation sustainably moving back back to target
Fed must balance lowering inflation against slowing economy too much
Fed can likely achieve goals without causing notable economic pain
Still too much job market demand
Wage growth remains elevated
Core services inflation moderation has been modest
Expects economy to slow into end of year
This context calls for a patient and careful, but deliberate, approach to policy,
The Nov 1 meeting is showing a 40% chance of a hike.
The risk of inflation staying higher for longer must now be weighed against the risk that an overly restrictive stance of monetary policy will lead to a greater slowdown in activity than is needed to restore price stability. This context calls for a patient and careful, but deliberate, approach to policy, allowing time to assess the effects of policy actions to date, and then acting appropriately. Importantly, patience does not mean indecision, or a change in the commitment to the 2 percent target, but rather time to ensure that the economy is on a clear trajectory to achieve price stability.