Fed's Preparedness in Unstable Times

In a revealing interview with the Financial Times, Federal Reserve Bank of Boston President Susan Collins emphasized the central bank's readiness to intervene in the financial markets if necessary. "We would absolutely be prepared to act," Collins stated, highlighting the Fed's commitment to market stability.

Market Functioning Amid Trade War

Despite the recent volatility triggered by escalating trade tensions and President Donald Trump's tariff announcements, Collins noted that markets continue to "function well." She reassured that the Fed possesses the necessary tools to address any concerns regarding market functioning or liquidity that may arise.

Inflation Expectations and Rate Cuts

Addressing inflation, Collins projected it to rise "well above" 3% this year. However, she cautioned against relying on emergency rate cuts as a primary solution for liquidity and market functioning issues, suggesting a more measured approach.