Fed's Collins highlights economic resilience, concerns over stock market indifference

In a recent Q&A session, Susan Collins, President of the Boston Federal Reserve Bank, underscored the necessity for persistently high interest rates, attributing it to the resilience of the economy. The discussion took place on Thursday, shedding light on key aspects of the current economic climate.

Collins is closely observing the commercial real estate market across all sectors in the US and reported no major issues so far. She suggested that an analysis of real estate trends in countries with Zero Interest Rate Policy (ZIRP) might provide insights into potential developments in the US.

The President of the Boston Fed expressed concern over the stock markets’ nonchalant approach to higher inflation and interest rates. This indifferent attitude was particularly noticeable following the release of an unexpected Producer Price Index (PPI) figure. The stock markets’ reaction to the Consumer Price Index (CPI) was also discussed during the session.

The future of the bank term funding program remains undetermined, as deliberations within the Fed continue. Collins’ insights provide a comprehensive overview of the current economic landscape, highlighting both robust aspects and areas of concern.

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