A lot has happened in the economy in the 16 months since Susan M. Collins took over as president of the Federal Reserve Bank of Boston.
But Collins has remained steadfast in her outlook that inflation can be tamed without triggering a painful recession.
“While there’s a lot of risks out there, that I remain optimistic that we can bring inflation down in a reasonable amount of time with quite a modest rise in unemployment,” Collins told reporters at the Boston Fed headquarters on Friday.
But Collins also stuck with her view that the Fed will have to keep interests high until there is convincing evidence that inflation is under control.
“I continue to think it will be important for us to maintain a restrictive stance for some time,” she said as she answered questions following the first day of the Boston Fed’s annual economic conference.
The government reported on Tuesday that inflation slowed in October, prompting many forecasters to predict that the Fed is done boosting rates. But Collins said it was too soon to make that call, saying another rate hike remains a possibility.
“I think the options are on the table and we need to be patient,” she said.
Collins said the economy’s ability to weather a spike in inflation in 2021 and 2022 is one reason she’s optimistic that a sharp rise in the jobless rate can be avoided. The national unemployment rate has increased in recent months -- October’s 3.9 percent was the highest since the beginning of 2022 -- but remains historically low.
“We’ve seen quite a bit of resilience in the economy,” she said.
“There has been some promising evidence of inflation coming down,” she said, but “we have a ways to go.”
