Fed’s Collins Backs Gradual Rate Hikes

Boston Fed President Susan Collins backed gradual, modest interest-rate increases for now, saying elevated and broadening inflation must be weighed against a stable labor market, possible economic shocks and the risk that higher long-term borrowing costs will restrain demand. She cautioned that a preference for gradual action does not commit the Fed to a fixed schedule, and said recent inflation and employment data have led her to expect rates may need to end up higher than she previously anticipated. Her comments come as some Fed officials signal openness to a larger increase, while markets broadly expect another quarter-point hike in December and a further increase in January.