We’re quite likely to hold current rates for some time
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Federal Reserve (Fed) Bank of Boston President Susan Collins said on Tuesday that it will be appropriate to hold in the current range for some time. Key quotes I’m watching to see if high productivity helps disinflation process. So far hearing AI has been enhancing work, not displacing workers. I am a cautious optimist regarding all economic impact. Overall the unemployment rate is low. Tariff ruling adds bit of potential inflation persists. Latest tariff news has not altered outlook much. We’re quite likely to hold current rates for some time. Fed policy mildly restrictive and may be close to neutral. It seems to me that monetary policy should be patient and deliberate. Baseline view is that inflation should decline later this year. Seeking more confidence disinflation has resumed. Lower job growth may reflect productivity and uncertainty. Job market softened last year but wasn’t soft. There may be more stability in job market amid fragility. Recent job data has been promising. Market reaction At the time of writing, the US Dollar Index (DXY) is trading around 97.88, up 0.14% on the day. Fed FAQs Monetary policy in the US is shaped by the Federal Reserve (Fed). The Fed has two mandates: to achieve price stability and foster full employment. Its primary tool to achieve these goals is by adjusting interest rates. When prices are rising too quickly and inflation is above the Fed’s 2% target, it raises interest rates, increasing borrowing costs throughout the economy. This results in a stronger US Dollar (USD) as it makes the US a more attractive place for international investors to park their money. When inflation falls below 2% or the Unemployment Rate is too high, the Fed may lower interest rates to encourage borrowing, which weighs on the Greenback. The Federal Reserve (Fed) holds eight policy meetings a year,…
Filed under: News - @ February 25, 2026 12:26 am