A senior official at the U.S. Federal Reserve said on Monday that the continued rise in inflation and the renewed fighting in the Middle East during August were among the main reasons that led her to support raising borrowing costs last week, while noting that she also expects interest rates to be raised again later this year.<\/p>\n
\u201c Susan Collins,\u201d president of the Federal Reserve Bank of Boston, said in an interview with The Associated Press that she supported the Federal Reserve\u2019s decision last Wednesday to raise the benchmark interest rate by a quarter of a percentage point to around 3.9%. \u201cCollins\u201d added that she expects the Federal Reserve to keep interest rates unchanged during the coming year.<\/p>\n
\u201cI have not seen the progress on inflation that I had hoped to achieve,\u201d she said, adding that geopolitical developments indicate the possibility of continued additional pressure on energy prices. She noted that there are reasons to believe that the likelihood of inflation remaining above 2% has increased, which is the target set by the Federal Reserve and one it has failed to achieve for more than five years.<\/p>\n
\u201cCollins\u201d was the second Federal Reserve official to speak on Monday about her outlook on interest rates, following \u201cAustan Goolsbee,\u201d president of the Federal Reserve Bank of Chicago, who spoke earlier in London and later participated in a roundtable with journalists.<\/p>\n
The two officials discussed inflationary pressures resulting from supply-side shocks such as the war in Iran, alongside the strength of business and consumer spending.<\/p>\n
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