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4h ago

Fed Officials Split on Path of Easing as Collins Urges Caution, BoE Deputy Downplays UK Inflation 'Hump'

Markets price another cut, with officials stressing strict data dependence.

Federal Reserve Bank of Boston President Susan Collins stands behind the Jackson Lake Lodge in Jackson Hole, where the Kansas City Fed holds its annual economic symposium, in Wyoming, U.S., August 24, 2023. REUTERS/Ann Saphir
Federal Reserve Bank of Boston President Susan Collins stands behind the Jackson Lake Lodge in Jackson Hole, where the Kansas City Fed holds its annual economic symposium, in Wyoming, U.S., August 24, 2023. REUTERS/Ann Saphir
Federal Reserve Vice Chair Philip Jefferson speaks at a conference of the National Association for Business Economics in Dallas, Texas, U.S., October 9, 2023. REUTERS/Ann Saphir
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Overview

  • Boston Fed President Susan Collins backed September’s quarter-point cut and said further easing this year could be appropriate if the data warrant it, warning that aggressive moves risk reigniting inflation.
  • Fed Vice Chair Philip Jefferson said the labor market is softening and could face stress without support, supported the recent cut, and expects disinflation to resume after this year despite unusually high policy uncertainty.
  • Cleveland Fed President Beth Hammack cautioned that inflation may not return to 2% until late 2027 or early 2028 and argued for maintaining a restrictive stance for now.
  • Market pricing points to high odds of another quarter-point reduction at the Oct. 29 meeting, even as officials emphasize a gradual, data‑driven approach laid out in recent projections.
  • At the Bank of England, Deputy Governor Sarah Breeden called the recent rise in UK inflation a transitory hump and warned that keeping rates high for too long risks hurting jobs and pushing inflation below target.