Boston Federal Reserve President Susan Collins has indicated that further interest rate cuts are necessary but stressed the need for a careful approach to avoid acting too quickly or too slowly. Speaking at the University of Michigan, Collins explained that while the ultimate direction of monetary policy remains uncertain, current rates are still somewhat restrictive, warranting additional easing.

She highlighted that the Federal Open Market Committee (FOMC) is in a good position to address both inflation and employment risks, allowing policymakers to carefully evaluate new data before making decisions. Collins also noted that recent adjustments provide the Fed with the flexibility to proceed deliberately in its next steps.

The Fed has already cut rates by a quarter point this month, following a half-point reduction in September. Collins and other officials have emphasized the importance of caution, given uncertainty about how much further borrowing costs can be lowered.

Collins described the economy as being in a stable position overall, with inflation trending toward the Fed’s 2% target, though progress may be uneven. She pointed out that strong consumer demand could still drive prices higher and that job growth is becoming increasingly concentrated in certain sectors, making further hiring slowdowns undesirable.

While a December rate cut is still under consideration, Collins made it clear that the decision will depend on upcoming economic data. The Fed plans to release updated projections for interest rates and the economy after its December 17–18 meeting. Despite the uncertainties, Collins expressed confidence that inflation is on a solid path toward the Fed’s goals, even if short-term fluctuations persist.