Fed's Collins Favors Holding Rates Steady 'For Some Time'

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00:00I supported the additional 25 basis point cut at the last FOMC meeting.

00:05With downside risks to employment increasing relative to the upside risks to inflation,

00:10this past summer I decided that dialing the restrictiveness of our policy stance down another notch

00:17was prudent because it provides a bit more support to the employment side of our mandate.

00:23Importantly, the current policy stance does remain restrictive, if only mildly so.

00:29And that should help ensure the disinflation process resumes next year.

00:35But given my baseline outlook, it likely will be appropriate to keep policy rates at the current level for some time

00:43to balance the inflation and the employment risks in this highly uncertain environment.

00:51I see several reasons to have a relatively high bar for additional easing in the near term.

00:56Although monetary policy is still mildly restrictive, broad financial conditions are a tailwind,

01:03not a headwind, to economic growth.

01:06And given this tailwind, economic activity has been holding up quite well,

01:10with both household and business demand remaining resilient overall.

01:16And against this backdrop, providing additional monetary support to economic activity runs the risk of slowing,

01:23slowing, or possibly even stalling, the return of inflation to target.

01:28And with resilient demand, the downside risks to employment while present do not seem to have increased further since the summer.

01:37Absent evidence of a notable labor market deterioration, I'd be hesitant to ease policy further,

01:44especially given the limited information on inflation due to the government shutdown.

01:50Until we can assess some of the effects of the cumulative policy easing since September,

01:55it seems prudent to ensure that inflation is durably on a trajectory back to 2%

02:01before making further adjustments to our policy stance.

02:05The current level of policy rates, in my view, leaves policy well-positioned to address a range of possible outcomes

02:13and to balance risks on both sides of our mandate.