Boston Fed's Collins Backed Rate Hike, Sees One More in 2026; Goolsbee Warns of Economic Pain

Boston Fed President Susan Collins said Monday she supported last week's quarter-point rate increase, which lifted the benchmark rate to roughly 3.9%, and expects one more hike before year-end, per remarks to the Associated Press on September 22, 2026. Collins cited insufficient inflation progress and Mideast conflict resumption among her reasons, adding she expects rates on hold through 2027. She said district businesses report cost pressures they may pass to consumers, a dynamic that could keep inflation elevated. Chicago Fed President Austan Goolsbee, speaking the same day, said the Fed may need to cause economic pain to curb inflation and suggested a single additional hike might not suffice if data point to demand-driven price pressures. Neither official votes on the rate-setting committee this year; Goolsbee's rotation returns in 2027, Collins's in 2028. The Fed's favored PCE inflation gauge stood at 3.7% year-over-year in June, above the 2% target for more than five years.