Boston Fed President Collins backs another rate hike this year, warns of inflation rebound

Boston Fed President Susan Collins said she supports another modest rate hike before the end of this year to keep inflation moving sustainably toward the Federal Reserve’s 2% target, with the specific action depending on incoming data and changes in risks. She noted that core PCE inflation was running at an annualized rate of just 2% over the past three months, but rising prices for jet fuel, diesel and heating oil could push both headline and core inflation above target again in the coming months, while adding to price pressures in transportation, lodging and materials for data center construction. New York Fed President John Williams also supports one more rate hike this year; markets expect the Fed to leave rates unchanged at the end of this month and raise them again in December.