Fed's Collins (2025 voter) says that inflation will continue to come down with a healthy labour market but it will take more time, via BBG interview

• Policy is not on a pre-set path.


• Current environment calls for patience.


• Continuing to form outlook, there are uncertainties and risks.


• Too soon to tell if it's an inflation bump or more.


• CPI numbers were on the high end of expectations.


• CPI does not change outlook for inflation to come down.


• Wage growth has been faster than it was pre-pandemic. Still consistent with inflation returning to 2%.


• Very optimistic that inflation will come down.


• Need to look at a range of data, not put too much weight on one piece.


• Risks are two sided on policy.


• Must be cautious about moving too quickly, wouldn't say there is no risk of the Fed waiting too long.


• Policy is moderately restrictive, which calls for patience.


• It will be appropriate to begin easing, but they are not there yet.


• Base line for rate cuts later this year, but later than she had initially thought.


• Election does not hinder Fed monetary policy plans.


• Consumption and demand have remained relatively strong.


• Does not want to speculate if June is back on the table or not. Will be data dependent, fed is not on a pre-set path.


• PCE is the preferred measure, but they do look at all of the price data.


• Wants greater confidence on outlook before they change policy stance.


• In the near term she does not see urgency for rate cuts. Seeing less reason of concerns in the labour market, sees lots of reasons for patience.


• Over longer term, Fed will ease and interest rates will be at lower levels, but cannot say at what specific levels.


• No decisions were made on the balance sheet, minutes explained the discussions. 


• Balance sheet taper and rate cuts are independent. 

12 Apr 2024 - 14:02- Fixed IncomeData- Source: Bloomberg