Fed’s Collins: Another rate hike is likely

By the Editorial Team · Wednesday, October 14, 2026

Boston Fed President Susan Collins indicated that additional interest rate hikes are likely before year-end to help achieve the Fed’s 2 percent inflation target, with decisions dependent on upcoming economic data. She highlighted potential risks from AI-driven investment surges and persistent price pressures, stressing the need to monitor whether inflation spreads beyond energy and technology sectors.

Federal Reserve Bank of Boston President Susan Collins indicated that additional interest rate increases are likely before the end of the year as part of efforts to bring inflation back to the central bank’s 2 percent target. Speaking at a banking conference hosted by the Boston Fed on Monday, Collins emphasized that any further rate adjustments would depend on upcoming economic data.

The Federal Open Market Committee (FOMC) raised rates by a quarter percentage point in September in a move unanimously supported by all 19 policymakers. The increase was described by Chairman Kevin Warsh as a step to remove a “dose of accommodation” from the economy. Projections released after the September meeting suggested a consensus among Fed officials anticipating at least one more rate hike within 2023. Officials have signaled that the recent hike should allow some pause before additional tightening, with the next FOMC meeting scheduled for October 27-28 in Washington.

Collins expressed confidence that the U.S. economy will continue to grow and that the labor market will remain near full employment. Under this outlook, inflation is expected to gradually decline to the Fed’s 2 percent goal, supported by gains in efficiency that help balance supply and demand. However, she outlined two alternative scenarios that could complicate this trajectory.

One involves a surge in investment driven by advancements in artificial intelligence, potentially leading to an overheated labor market and sustained inflationary pressure above the target. The other concerns persistent price challenges stemming from tariffs and energy costs, particularly if conflicts such as the war involving Iran continue to disrupt markets.

The Boston Fed president noted the importance of monitoring whether inflation remains concentrated in sectors related to energy and AI-related investments or starts to spread more broadly across the economy. She described the current economic strength not as a sign of overheating but as a result of both robust demand and improvements in the economy’s productive capacity.

Collins’ remarks reflect ongoing Federal Reserve concerns about balancing growth and inflation risks as policymakers weigh the course of monetary policy in the coming months.

This article was reported by synthesizing coverage from multiple independent news outlets to present a balanced, unbiased account. Read about our editorial standards. Spotted an error? Let us know.