Boston Fed’s Collins: Fed to keep policy restrictive
Boston Fed President Susan Collins said the Fed will likely keep policy restrictive as inflation remains a concern, lowering market odds of a June 2026 rate cut.
In recent remarks, Boston Federal Reserve President Susan Collins said the Fed is likely to keep monetary policy restrictive as inflation remains a concern, a stance that pushed market odds of a June 2026 rate cut sharply lower.
Collins described the current policy stance as “well positioned” to manage economic risks and said interest rates might need to remain restrictive for an extended period.
Prediction market pricing showed the probability of a June 2026 rate cut fell to about 1.2%, down from roughly 2% a day earlier and 4% a week earlier. Traders increased the odds that the Fed will hold its current rate or move higher if inflation pressures persist.
The Federal Reserve left the federal funds rate target at 3.5%–3.75% at its April 2026 meeting, maintaining a restrictive stance aimed at bringing inflation down. Collins’ comments reinforced the Fed’s focus on inflation outcomes rather than near-term easing.
She noted that geopolitical tensions, including the U.S.-Iran conflict, have contributed to higher energy costs and faster price growth. She added, “Inflation remains a significant concern for the Federal Reserve.”
Market contracts beyond June reflected muted expectations for early cuts, with one showing roughly a 15% chance of a rate cut by September 2026. Investors and policymakers will watch upcoming U.S. inflation reports, employment data and further Federal Reserve speeches, as well as developments in international energy markets, for signs of whether price pressures are easing.
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