Fed’s Collins expresses hope that inflation can be tamed without hitting jobs.

On Friday, President of the Boston Federal Reserve Susan Collins said she is confident that policymakers can tame inflation without harming employment. “By raising rates, we are aiming to slow the economy and bring labor demand into better balance with supply,” Collins said in prepared remarks for a Boston Fed conference on the labor market. “The intent is not a significant downturn. But restoring price stability remains the current imperative and it is clear that there is more work to do.” Her expression comes amidst an aggressive campaign to bring down runaway inflation by the Fed. A series of rate hikes has brought the central bank’s overnight borrowing rate to a range of 3.75%-4%, and virtually all other Fed officials have said they expect more increases to come.

In her remarks, Collins noted the importance of bringing down inflation and recognized that the Fed’s moves could exact a price. Collins is a voting member of the rate-setting Federal Open Market Committee, which next meets Dec. 13-14, when it is largely expected to raise its funds’ rate another half percentage point. “I remain optimistic that there is a pathway to re-establishing labor market balance with only a modest rise in the unemployment rate – while remaining realistic about the risks of a larger downturn,” Collins said, adding that she thinks “there is a pathway to reestablishing price stability with a labor market slowdown that entails only a modest rise in the unemployment rate.”