BAF NEWS

Collins leans against December 2025 rate cut as data gaps keep Fed cautious

Collins leans against December 2025 rate cut, citing a mildly restrictive stance and lingering inflation. She favors waiting for more data ahead of the December 9–10 FOMC meeting.

TL;DR

Boston Fed President Susan Collins signaled no urgency for another move, calling policy appropriate and mildly restrictive. Collins leans against December 2025 rate cut unless the labor market deteriorates notably. Limited releases after a government shutdown add uncertainty, reinforcing a wait-and-see stance into the December 9-10 FOMC meeting.

Collins leans against December 2025 rate cut

Collins leans against December 2025 rate cut, saying policy is “appropriate for now” and mildly restrictive as inflation remains elevated, according to interviews and coverage. She signaled no urgency to ease at the December 9-10 FOMC meeting. Reports point to a high threshold for further cuts.

Boston Fed Susan Collins emphasized the balance between inflation and employment. However, she left room for a shift if conditions change.

Policy “appropriate for now” and mildly restrictive

Collins described the stance as mildly restrictive Fed policy. After two reductions, she said it remains right for now.

As Boston Fed Susan Collins put it, holding steady is “appropriate for now.” Therefore, patience is preferred amid still-elevated prices.

Timeline: Two cuts in Sep/Oct, November signals, and Dec. 9–10 decision ahead

The Fed delivered two 25-basis-point cuts in September and October, setting the federal funds target at 3.75%–4.00%. November remarks then guided expectations into December.

Yet Collins leans against December 2025 rate cut as the committee nears the December 9-10 FOMC meeting. Moreover, government shutdown Fed data gaps have limited some indicators officials usually watch.

Data dependence and labor-market threshold for easing

She wants more data before deciding on December. If the labor market were notably deteriorating, near-term easing could be justified.

But officials have not seen a significant change in unemployment. Therefore, her base case remains to hold.

Inflation still elevated into early next year, tariff pass-through

Collins expects inflation to stay elevated through year-end into early next year. She cited tariff pass-through among the pressures that still need time to fade.

Because inflation still elevated tariffs may keep prices sticky, holding steady can help manage the transition. However, she expects those tariff effects to wane over time. She also noted inflation still elevated tariffs effects should gradually fade.

Collins leans against December 2025 rate cut: balancing risks

Her hesitance reflects a balance between still-elevated inflation and a cooling, but not sharply weakening, job market. That calculus argues for patience.

Thus, Collins leans against December 2025 rate cut while staying data-dependent. Markets will watch for any pivot if labor indicators turn.

Policy nearer neutral after two cuts

After the September and October reductions, she said policy is much closer to a neutral stance. Even so, it remains mildly restrictive Fed policy that continues to pressure inflation lower.

Consequently, officials can wait for clearer evidence before acting. Yet they are not closing the door to further cuts if needed.

What’s Next: December FOMC decision and incoming data

The Fed will digest the latest indicators and surveys before the December 9-10 FOMC meeting. Limited releases after the government shutdown Fed data shortfall complicate the picture.

Additionally, officials appear more divided heading into December, according to available reports. Still, Collins leans against December 2025 rate cut unless labor signals shift. Meanwhile, government shutdown Fed data constraints still color the outlook.