Fed's Collins Backed Rate Hike, Warns Inflation Likely to Stay Above 2% Target

Boston Federal Reserve President Susan Collins said she supported the US central bank's decision last week to raise interest rates, warning that future inflation will likely remain notably above the 2% target. "I now see an increased likelihood of future scenarios in which inflation remains notably above 2%," Collins wrote on LinkedIn on September 22, 2026. She cited a better-positioned labor market as allowing monetary policy to focus on a timely return to price stability, adding that "a somewhat more restrictive federal funds rate will help ensure that inflation durably returns to target." The Fed raised its rate target by a quarter point to 3.75%-4.00%, with policymakers projecting another increase before year-end. Collins, a non-voting FOMC member this year, did not say whether she favors another hike. She noted much of the price pressure stems from supply shocks, including the US-Israeli war with Iran, which tighter policy struggles to counter.