Fed's Collins says FOMC is at or near the peak of the rate hike cycle

<p>Federal Reserve Bank of Boston President Susan Collins gives 2023 Goldman Lecture in Economics, "Reflections on Policymaking Amidst (Pandemic) Uncertainty".</p><p>Headlines via Reuters:</p><ul><li>
Fed is at or near peak of rate hike cycle</li><li>Further rate hike
could be warranted depending on incoming data</li><li>Expects Fed to keep
policy restrictive for some time</li><li>Policy must stay
restrictive until clear sign inflation moves to target of 2%</li><li> Optimistic
inflation can be tamed with ‘orderly slowdown,’ small jobless
rise</li><li>Policy patience will
give fed time to get read on economy</li><li>Main uncertainty is
measuring impact of past fed actions</li><li>Fed faces challenges
in extracting signal from economic data</li><li>Cooler core
inflation will need softer labor market</li><li>Too soon to say core
inflation on trend for 2%</li><li>Chance of a soft
landing has gotten higher for economy</li><li>As savings dwindle,
economy becoming more responsive to rate policy</li></ul><p>I would have though some of these officials would be a little more circumspect given we get the latest CPI reading later on Thursday. Especially after the blow out PPI:</p><ul><li><a href="https://www.forexlive.com/news/us-september-ppi-22-vs-16-expected-20231011/" target="_blank" rel="follow" data-article-link="true">US September PPI +2.2% vs +1.6% expected</a></li></ul><p>And then … </p><ul><li><a href="https://www.forexlive.com/technical-analysis/us-stocks-trading-higher-despite-the-higher-ppi-data-20231011/" target="_blank" rel="follow" data-article-link="true">US stocks trading higher despite the higher PPI data</a></li></ul><p>Is there a little bit of sleepwalking going on? I don't want to be a curmudgeon but 2.2% vs. 1.6% and stocks continue merrily higher? </p><p>O</p><p>K</p><p>then … </p>

This article was written by Eamonn Sheridan at www.forexlive.com.