ICMYI – Fed’s Collins warns of prolonged path to inflation target

Boston Fed President Susan Collins spoke on Wednesday, saying that its likely to take longer than expected to get inflation back down to the Fed’s 2% target level:

• More from Fed’s Collins: Very strong jobs market has bolstered consumer spending
• Feds Collins: Expects demand will need to slow to get inflation to 2%

Collins repeating what many of here Federal Open Market Committee (FOMC) colleagues have been saying, rates to remain where they are for longer:

• “The recent upward surprises to activity and inflation suggest the likely need to keep policy at its current level until we have greater confidence that inflation is moving sustainably toward 2 percent,”

Lest she appears too hawkish, though, she did offer this:

• “The current situation requires methodical perseverance, recognizing that progress will take time and continue to be uneven. Expecting all indicators to be well-aligned is too high a bar to start normalizing policy”

The indicators Collins is looking at include:

• inflation expectations
• signs of disinflation
• signals from wages
• moderation of the labor market

Whioch all fits with the Fed’s dual mandate.

This article was written by Eamonn Sheridan at www.forexlive.com.