Susan Collins, Fed chief in Boston, says that the Fed "would absolutely be prepared" to help stabilize the financial markets if conditions were to become turbulent. She says this in an interview with the Financial Times.
Collins says that "the markets continue to function well" and that the Fed does not see any liquidity problems overall.
Furthermore, she states that inflation may exceed 3 percent this year and that interest rate cuts would not be the primary tool to respond to a deterioration of market function.
Collins' comments come during a week marked by intense turbulence on the American market since President Donald Trump initiated a global trade war.
John Williams, Fed chief in New York, also expects that the USA's tariff policy and reduced immigration will lead to slower economic growth, higher unemployment, and inflation.
At an event in Puerto Rico, Williams stated that the tariffs may raise inflation to 3.5-4 percent during the year.
Williams, just like Collins, signals that the Fed intends to maintain the current interest rate level, at 4.25-4.5 percent, pending the effects of Trump's economic policy.
