Boston Federal Reserve President Susan Collins asserted that the US central bank maintains flexibility to patiently evaluate interest rate adjustments, noting that strong corporate and household balance sheets could mitigate tariff impacts on the economy.

"The overall economic landscape remains sufficiently resilient, granting the Federal Reserve necessary latitude for methodical data analysis," Collins stated in prepared remarks for a National Association for Business Economics event in Washington. "Consequently, maintaining an approach of 'active patience' toward monetary policy continues to appear appropriate."

Federal Reserve officials have kept rates unchanged throughout this year while monitoring how President Trump's aggressive policies—particularly trade-related measures—affect economic conditions. While most policymakers anticipate tariffs will elevate inflation, recent conflicting data has sparked divergent views among decision-makers regarding the ultimate economic consequences.

Tuesday's consumer price report revealed core inflation fell short of expectations for the fifth consecutive month in June, yet simultaneously indicated tariffs have begun influencing certain commodity prices. Collins observed, "Financial indicators collectively suggest tariff effects may be attenuated through compressed corporate profit margins and consumers' sustained purchasing capacity despite price hikes. Thus, adverse impacts on labor market conditions and economic expansion could prove more contained."

Collins additionally disclosed that the Boston Fed has pioneered "a novel methodology quantifying how price surges at US borders transmit to domestic consumer prices." She projected the Fed's preferred core inflation gauge would "likely approach close to 3% before year-end before moderating," contrasting with May's 2.7% reading.