<div id="readability-page-1"><div> By Jessica Coacci and Matt Grossman <pre></pre> Boston Federal Reserve President Susan Collins said Wednesday she envisions a prolonged stretch of steady interest rates, and could envision a scenario that requires some policy tightening to ensure inflation returns to the central bank's 2% target. Textbook monetary policy prescribes looking through sudden supply shocks such as higher oil prices. Collins, delivering remarks in Boston, said more than five years of above-target inflation have reduced her patience for bringing down price increases. She said it will likely be necessary to maintain the current, restrictive monetary policy &#34;for some time.&#34; &#34;The shock has tilted risks to real activity somewhat further to the downside and risks to inflation further to the upside,&#34; Collins said, according to a published text of her remarks. Collins said she is hopeful that inflation will recede, which could allow the Fed to continue bringing interest rates lower later this year. But if the conflict drags on and prices continue to ratchet higher, &#34;I could envision a scenario in which some policy tightening is needed to ensure that inflation returns durably to 2 percent in a timely manner,&#34; she said. Drawing on Labor Department data published this week, many economists are estimating that the April reading of the Fed's preferred inflation metric, the price index of personal-consumption expenditures, will rise to 3.3% from 3.2% in March, excluding the volatile food and energy categories. Rising energy prices will almost certainly push the headline higher still. As the Iran conflict raises inflation risks, more Fed officials have said they want to put the possibility of rate hikes back on the table. Of the four officials who dissented at the Fed's April meeting, three objected to Fed guidance implying more rate cuts ahead. Instead, they wanted the Fed to signal that hikes were also a possibility if high inflation persists. Assuming the Middle East conflict is resolved relatively soon, Collins said she expects solid economic growth to continue this year, with only a modest rise in the unemployment rate. <pre></pre> Write to Jessica Coacci and Matt Grossman at jessica.coacci@wsj.com and matt.grossman@wsj.com <pre></pre> (END) Dow Jones Newswires May 13, 2026 11:44 ET (15:44 GMT)Copyright (c) 2026 Dow Jones &amp; Company, Inc.</div></div>

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Boston Federal Reserve President Susan Collins indicated that while she envisions a period of steady interest rates, there may be a need for rate hikes to ensure inflation returns to the 2% target. She expressed concerns over prolonged above-target inflation and the impact of rising energy prices. Collins noted that if inflation continues to rise due to ongoing conflicts, policy tightening might be necessary. Despite these challenges, she anticipates solid economic growth and a modest increase in unemployment this year.

- Boston Federal Reserve President Susan Collins indicated that a prolonged period of steady interest rates might be necessary, with potential policy tightening to meet the 2% inflation target.  
- Collins emphasized that persistent above-target inflation has reduced her patience for rate adjustments, while rising energy prices and ongoing conflict in the Middle East elevate inflation risks.  
- Economists predict that the Fed's preferred inflation metric will rise, and some officials advocate for considering rate hikes if inflation continues to be high.

Fed's Collins Says She Could Envision the Need for Rate Hikes