Federal Reserve Bank of Boston President Susan Collins has continued to shape the national conversation on interest-rate policy throughout 2026, with a series of public remarks tying the path of rates directly to incoming inflation data. In comments reported in late August, Collins said that whether the Federal Reserve holds rates steady continues to depend on further progress on inflation, underscoring a data-dependent posture that has characterized much of her public commentary this year.

Earlier in the year, in February remarks covered by Bloomberg, Collins indicated that interest rates were likely to remain on hold “for some time,” a view she reiterated in various forms across the following months even as inflation and labor-market data fluctuated. In May, according to reporting in the Boston Globe, Collins discussed her position within the Federal Open Market Committee, including how she has approached dissent within the committee’s deliberations, as well as changes among her fellow policymakers.

As the president of one of the twelve regional Federal Reserve Banks, Collins holds a rotating vote on the FOMC and is a closely watched voice on how the Fed weighs incoming economic data — including employment reports, inflation readings, and financial conditions — against the risk of moving too quickly or too slowly on rates. Her remarks throughout 2026 have generally emphasized patience, while leaving open the possibility that further rate moves, in either direction, would depend on how inflation data evolves in the months ahead.

For Boston-area banks, lenders, and businesses that depend on the cost of credit, the Boston Fed president’s public commentary is one of the more direct local windows into the Federal Reserve’s thinking. Collins, based in Boston, is one of the few Fed officials whose remarks carry a distinctly regional lens, often referencing conditions in New England alongside the national picture.

Massachusetts financial institutions and businesses will continue to watch Collins’ public appearances and the broader FOMC’s decisions in the coming months, as the Fed continues to weigh inflation trends against labor-market conditions in setting the path for interest rates through the remainder of 2026.

Sources:

• https://www.bloomberg.com/news/articles/2026-08-25/fed-s-collins-says-holding-rates-hangs-on-inflation-progress
• https://www.bloomberg.com/news/articles/2026-02-24/fed-s-collins-says-interest-rates-likely-on-hold-for-some-time
• https://www.bostonglobe.com/2026/05/13/business/federal-reserve-bank-boston-collins-rates/
• https://www.bostonglobe.com/2026/05/07/business/fed-collins-fomc-dissenters-statement/

Federal Reserve Bank of Boston President Susan Collins has a warning for anyone expecting interest rate relief soon: the next move could go the other way.

What Collins said

Speaking in late August, Collins said the Fed “will be appropriate to tighten policy soon” if the data doesn’t show sustained progress on inflation. It’s a notably firmer statement than the “hold steady” posture she and other Fed officials had signaled earlier in the year.

The inflation numbers behind the warning

Collins pointed to core PCE inflation — the Fed’s preferred gauge — running at an estimated 3.3% annually in July, well above the central bank’s 2% target. She noted inflation has now stayed elevated for more than five years, and that price concerns are widespread among businesses and households across New England.

The Fed’s policy rate has been parked in a 3.5%-3.75% range since December, and Collins’ comments suggest growing internal pressure to move if incoming data doesn’t cooperate.

What’s keeping prices elevated

Collins attributed the persistent inflation to a combination of factors: tariffs from federal trade policy, elevated oil prices tied to the conflict involving Iran, and heavy spending tied to AI infrastructure investment nationally. Locally, that national inflation picture lines up with regional data showing Boston-area prices up 3.7% year-over-year, led by a 16% jump in energy costs.

Why it matters for Massachusetts

A rate hike would ripple quickly through a state economy already dealing with a cooling housing market, a pullback in venture funding for the innovation sector, and rising costs for small businesses. Higher borrowing costs would likely make an already-expensive Boston housing market tougher to navigate for both buyers and developers, and could further slow the lab and commercial construction financing that the state’s innovation economy depends on.

What Collins is watching

Her core concern isn’t just current inflation — it’s what happens if inflation stays elevated long enough that households and businesses start expecting it to persist. That kind of shift in expectations, she’s warned, makes inflation meaningfully harder to bring back down. Boston Made’s Economy desk will track upcoming Fed commentary and inflation data releases as the central bank weighs its next move.

Massachusetts’ surtax on high earners — commonly known as the “millionaires tax” — has once again exceeded expectations, generating $3.1 billion in fiscal year 2026 with two months of collections still to be counted.

How the numbers stack up

The state originally budgeted for $2.4 billion in surtax revenue this fiscal year. Instead, collections have already topped $3.1 billion, building on the $3.0 billion collected in fiscal 2025. That’s a substantial jump from the roughly $2 billion a year that outside analysts initially projected when voters approved the measure back in 2022.

The surtax applies a 4% additional tax on household income above $1 million, with that threshold adjusted upward each year for inflation.

Where the money is going

State lawmakers have directed the revenue toward child-care grants, increased funding for the MBTA, and general budget operations. With collections running well ahead of plan, the Legislature is now budgeting to commit $2.7 billion in surtax revenue next fiscal year — nearly three times the $1 billion originally budgeted when the tax took effect.

The migration question

Critics of the surtax have pointed to high-income residents leaving the state as evidence the policy is backfiring, and some research has tied billions in departed income to the tax’s introduction. But the continued growth in collections complicates that narrative: as one campaign spokesperson put it, the trend suggests “the ultra-rich are clearly staying in Massachusetts” in large enough numbers, and earning enough, to keep pushing revenue higher year after year.

Why it matters

Surtax revenue has become a load-bearing piece of the state budget, particularly for transit and child care. Whether that revenue keeps outperforming will shape how much fiscal room Beacon Hill has in future budget cycles — and how much scrutiny the tax continues to draw from both sides of the debate.