U.S. inflation trends remain uneven after July’s Personal Consumption Expenditures Price Index rose 3.7% year-over-year, Boston Federal Reserve President Susan Collins said on Thursday. Speaking at the Fed’s annual economic symposium in Jackson Hole, Wyoming, Collins described the latest data as "mixed," noting both concerning elements and tentative signs of improvement.
Collins acknowledged that the headline inflation figure exceeded expectations, but emphasized that the increase was not broadly based across sectors. She pointed to portfolio management fees—driven by equity valuations rather than supply constraints—as a key driver of the rise, cautioning that such factors do not warrant a near-term policy shift. "A very broad-based elevation across market prices would have been more concerning," she said. The Fed’s 2% inflation target remains the benchmark for policy adjustments.
The Boston Fed president reiterated her baseline outlook for gradual disinflation, though she left the door open to further rate hikes if price pressures fail to subside. Her remarks follow research from the Boston Fed suggesting that productivity gains and fading effects from the Trump administration’s import tariffs could support further easing of price pressures. Collins declined to comment on U.S. Treasury Secretary Scott Bessent’s recent interventions in bond markets, stating that the Fed would "assess how things are evolving and address that matter as is appropriate."
Fed Chairman Kevin Warsh is scheduled to deliver a keynote address on Friday, where further insights on the central bank’s policy trajectory are expected. The Jackson Hole symposium serves as a key platform for Fed officials to outline their views on inflation dynamics and monetary policy ahead of the next policy meeting.
