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Senior Fed official warns US interest rates may need to rise again

American economy remains too hot to hit central bank’s inflation target, says Boston Fed president

A top official at the US Federal Reserve has raised the spectre of further interest rate rises in the US, warning that the strength of the world’s largest economy means “we may have more to do”.

In an interview with the Financial Times on Thursday, Susan Collins, president of the Boston Fed, said she was “surprised” by the economy’s resilience — including a tight labour market and robust consumer spending — despite months of higher borrowing costs.

“I am not yet seeing the slowing that I think is going to be part of what we need for that sustainable trajectory to get back to 2 per cent [inflation] in a reasonable amount of time,” Collins said, later adding that “that resilience really does suggest we may have more to do”.

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