Fed's Collins: Labor strength lets Fed prioritise price stability goal

Fed's Collins says a stronger labor market allows policymakers to focus on price stability after five years of high inflation.

22/09/2026 13:513 min read
  • Monetary policy can now focus on bringing inflation back to target in a timely manner, now that the labour market is in a moderately stronger position, particularly after half a decade of excessively high price growth
  • Labour market conditions appear somewhat more robust, even though the threats of rising inflation have grown
  • There is now a higher probability of scenarios where inflation stays well above 2%, in her view
  • She backed the rate increase implemented last week
  • A "somewhat more restrictive" federal funds rate will help guarantee that inflation consistently returns to its target

The natural question that arises is what exactly 'somewhat more restrictive' means. Based on pricing in the Fed funds curve, markets anticipate a little over three additional rate rises, roughly at the pace of every other meeting. The meeting on October 28 is priced at just over 50%.

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