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Remarks at the 22nd Annual Regional and Community Bankers Conference By Susan M. Collins October 12th, 2023 Federal Reserve Bank of Boston Federal Reserve Bank of Boston’s 22nd Annual Regional & Community Bankers Conference Perspectives on the Economy: Remarks at the 22nd Annual Regional & Commu… Commu… Takeaways from Boston Fed President Susan M. Collins’ October 12, 2023 Remarks 1. Collins knows inflation is still taking a toll across New England, but inflation is moderating. In her travels around New England, Collins has spoken with residents and business owners who are continuing to struggle with higher prices. But she sees the Fed making progress in its efforts to lower inflation, as some signs are emerging that demand and supply are realigning. 2. Despite some favorable indicators, Collins says it’s too soon to be confident that inflation is on a sustained trajectory back to the Fed’s 2 percent target. Collins says much of the recent moderation in the core inflation measure is due to declines in core goods inflation, which can be traced to improvements in supply chain conditions. But she adds that firms’ incentives to pass on these costs savings may be short-lived unless demand slows. Meanwhile, core services inflation remains elevated. 3. The recovery from the pandemic has been unusual, and Collins says that in this highly uncertain environment, policymaking requires patience. Collins says that policymakers need time to draw conclusions about the data and allow special factors that have been supporting near term activity to play out. She adds it’s unlikely we’ve yet seen the full effects of the Fed’s actions to date, so patience is critical as policymakers weigh the risk of inflation remaining persistently high against the risk of activity slowing more than expected. 4. Recent increases in long-term interest rates reinforce Collins’ view that we’re very near or perhaps at the peak of the current tightening cycle. Collins noted the 10-year Treasury yield has moved up since mid-September, and that increase has been accompanied by higher corporate bond yields and mortgage rates. Collins says the rise in these rates implies some tightening of financial conditions, which if persistent could reduce the need for further monetary policy tightening. It also reinforces her view that we are very near or perhaps at the peak of this tightening cycle. 5. Collins’ travels around New England have given her insight into its strengths and challenges and shown her again how important community banks are to regional economic health. Shared concerns include childcare, housing, and infrastructure. At the same time, the region benefits from its collective brainpower, a diverse and skilled workforce, and relatively high job opportunity. Collins says the region’s banking industry plays an essential role everywhere, serving communities of all sizes and providing households and businesses with the funding they need for economic health and growth. Sign up for Boston Fed news and insights. Subscribe See our privacy policy (/about-the-boston-fed/termsofuse.aspx) Media Inquiries? Contact our media relations team. We connect journalists with Boston Fed economists, researchers, and leadership and a variety of other resources. Media Relations (/news-and-events/media-relations.aspx) About the Authors Susan M. Collins (/people/bank/susan-m-collins.aspx) Susan M. Collins is President & Chief Executive Officer of the Federal Reserve Bank of Boston. Resources Keywords inflation , Supply , Demand , Maximum Employment , Price Stability , monetary policy , Federal Funds Rate , Pandemic , uncertainty Related Content 13th Annual Regional & Community Bankers Conference (/news-and-events/events/regional-communitybankers-conference/13th-annual-regional-community-bankers-conference.aspx) 7th Annual Regional & Community Bankers Conference (/news-and-events/events/regional-communitybankers-conference/7th-annual-regional-community-bankers-conference.aspx) 15th Annual Regional & Community Bankers Conference (/news-and-events/events/regional-communitybankers-conference/15th-bankers-conference.aspx) 20th Annual Regional & Community Bankers Conference (/news-and-events/events/regional-communitybankers-conference/20th-annual-regional-and-community-bankers-conference.aspx) 21st Annual Regional & Community Bankers Conference (/news-and-events/events/regional-communitybankers-conference/21st-annual-regional-and-community-bankers-conference.aspx)