Fed should ease if labor market risks outweigh inflation, Collins says

[U.S. Federal Reserve]

Federal Reserve Bank of Boston President Susan Collins said Friday that if labor market risks start to outweigh inflation concerns, it would be appropriate for the U.S. central bank to ease back from its current "modestly restrictive" stance.

"It's not a done deal in terms of what the Fed will do at its next meeting" on Sept. 16-17, Collins said in an interview with Bloomberg TV in Jackson Hole, Wyoming, noting more data will come out between now and then.

"The risks on the two sides [of the Fed's dual mandate] have come into rough in balance, she said. With upside risks to inflation tied to tariffs and downside risks to jobs, Collins is backing the Fed's current rate stance remains appropriate at the elevated 4.25%-4.50% target range.

At the same time, though, "we cannot wait until all of the uncertainty is behind us," the Boston Fed chief said. "You've got to make decisions in real time."

She underscored how the Fed needs to balance its inflation and employment goals to offset any stagflation risks.

Collins' remarks come ahead of Fed Chair Jerome Powell's highly-anticipated speech [https://seekingalpha.com/news/4488230-feds-powell-at-jackson-hole-heres-what-to-watch] at the annual Jackson Hole Economic Policy Symposium hosted by the Kansas City Fed.

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