- Has been expecting to see continued productivity gains, it’s not just AI-driven.
- Employment rate remains relatively low.
- There is been a long list of recent supply shocks, is very focused on supply-side issues.
- Fed inflation targeting factors driving prices.
- Strong productivity gains should help lessen inflationary pressures
- Looks forward to working with new Fed chair Kevin Warsh
- Very valuable to have different perspectives on the Fed
After being more, hawkish in her earlier comments, these comments leaned modestly dovish and supportive of the soft-landing narrative. Collins emphasized that productivity gains are continuing and are not solely tied to AI, which suggests she sees the economy’s supply side improving in a way that can help absorb growth without fueling inflation.
Her focus on the long list of recent supply shocks and supply-side factors driving prices also implies she views inflation pressures as not purely demand-driven, which tends to argue against an overly aggressive policy response. At the same time, she acknowledged the labor market remains strong, but without framing it as a major inflation concern.
Overall, the comments suggest growing confidence that stronger productivity and improving supply conditions can help ease inflation pressures over time while supporting continued economic growth.
She adds:
- IN markets, anything that expands rapidly get attention.
- Top of mind to understand what’s happening with private credit.
- Many key economic indicators are very volatile right now
