Boston Fed President Collins: Gradual rate hike path appropriate; labor market holding steady without pushing up prices

Boston Fed President Susan Collins said a gradual pace of rate hikes would be an appropriate path to bring down inflation, with the labor market holding steady and not putting additional pressure on prices. "I see price pressures broadening out, and they've been high for a long time," Collins told reporters Saturday in Boston. "For now, a steady, gradual path looks appropriate to me, but I'm open-minded." She reiterated that the direction of monetary policy is clear, but again declined to signal the speed and magnitude of central bank rate increases. Just last Friday, the Boston Fed president said some additional tightening would be needed "sooner rather than later." Last month, Fed officials held rates steady in the 3.75%-4.00% range; they now appear poised to raise rates again at their next meeting in early December in Washington. According to federal funds futures pricing, investors expect hikes in December and January, with a third move coming in March or April. Collins is not a voting member on monetary policy this year. Collins noted that consumers' expectations for future inflation remain roughly anchored near the Fed's 2% target, while wage gains are concentrated in pockets of the labor marketparticularly positions tied to highly skilled workers. "My most likely scenario is one where healthy consumer demand and business investment continue, and with a slightly tighter policy path, we can bring inflation down in a reasonable amount of time without the labor market having to change materially," she said Saturday. But she also laid out risk scenarios: inflation could come in higher than expected if demand pressures are more severe, wage gains broaden, or the economy suffers additional shocks. She also said she is watching rising goods prices"they've gone up a bit." "I also recognize that we still face persistent uncertainty, with scenarios in which inflation is more stubborn," Collins said. In recent remarks, policymakers have differed on the pace and magnitude of rate hikes: one group of officials favors gradual increases, while another has signaled that faster action is needed. Governor Christopher Waller has even advocated for a 50-basis-point hike.