Boston Fed President says December rate cut isn’t a ‘done deal’

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Subscribe to enjoy similar stories. A Federal Reserve official said the central bank could eventually need to slow down the pace at which it is lowering rates and said it was too soon to say whether that should happen at the central bank’s meeting next month. Another rate cut in December is “certainly on the table, but it’s not a done deal," said Boston Fed President Susan Collins in an interview Thursday.

“There’s more data that we will see between now and December, and we’ll have to continue to weigh what makes sense." The Fed’s next meeting is Dec. 17-18. Officials will see data on inflation and employment for November before that meeting.

October inflation data released this week was somewhat firmer than expected, Fed Chair Jerome Powell said in remarks Thursday. Collins said she didn’t see any evidence that inflation was picking up due to new sources of strength in the economy, aligning herself with a view Powell expressed last week. Both of them suggested recent inflation stickiness has instead been an echo or “catch-up" effect of large price increases from the past few years, such as car insurance costs rising to reflect past increases in car prices that have since subsided.

“As far as I can tell, I do not see evidence of new price pressures," said Collins. Firmer inflation in recent months instead reflects “the effects of the longer-term dynamics of past shocks," she said. The Fed cut interest rates at its two most recent meetings, beginning with a half-percentage-point reduction in September amid signs the labor market might be weakening.