Boston Fed’s Collins Opposes New Rate Cuts Amid Data Freeze
Boston Fed President Susan Collins, who backed October’s 25-basis-point rate cut, now urges pausing further rate cuts amid the US government shutdown and suspension of key economic data. With limited information and inflation still above the 2% target, Collins warns that another rate cut risks undoing progress on price stability. She recommends holding the federal funds rate — currently around 3.75%–4% — steady to balance inflation and employment risks. Fed Chair Jerome Powell has signaled that a December rate cut is “not certain,” underscoring deepening divisions between the Fed’s hawkish and dovish members. According to the CME FedWatch Tool, markets assign a 53.9% probability to a 25 bps cut in December and a 46.1% chance of holding rates. This rare internal split and data freeze may increase volatility in risk assets, including cryptocurrencies.
Bearish
Delaying further rate cuts and signaling uncertainty on future easing typically reduces liquidity and raises borrowing costs, dampening risk-asset sentiment. In past cycles, when the Fed paused after initial cuts—such as in late 2018—equities and crypto underperformed due to higher real yields. The current data freeze heightens unpredictability, likely prompting traders to reduce leveraged positions in volatile markets like cryptocurrency. While a December cut remains possible, Collins’s stance suggests a higher threshold for rate relief, pointing to short-term bearish pressure on crypto and broader risk assets.