The US economy is at risk of tipping into a recession as the central bank seeks to ensure high inflation does not become more deeply entrenched, Susan Collins has warned in her first public remarks since becoming president of the Federal Reserve’s Boston branch.
Speaking at an event on Monday, Collins, whose tenure began in July, highlighted the challenges facing the Federal Reserve as it confronts price pressures that have not only spread to a broad range of sectors but are also proving to be far harder to root out.
While she said that the Fed could return inflation back to its 2 per cent target with only a “more modest slowdown” and “a somewhat higher unemployment rate”, she also emphasised the economy’s vulnerability to a much more severe outcome.