Boston Fed President Collins: Fed "Fully Prepared" to Intervene in Markets

Key Points:

• Boston Fed President Susan Collins stated in an FT interview, "We would absolutely be prepared" to address challenging market conditions if necessary.

• Collins noted that, at present, markets are functioning well and the central bank is not seeing any liquidity issues.

• Bitcoin surged close to $84,000, up 6% in the last 24 hours, while the Nasdaq and S&P 500 extended their Friday gains to nearly 2%.

Boston Federal Reserve President Susan Collins affirmed that the central bank is "absolutely" prepared to intervene and stabilize financial markets if necessary. In an interview with the Financial Times, she stated, "We would absolutely be prepared to do that as needed." However, she emphasized that, at present, markets are functioning well, and there are no significant liquidity concerns. 

Despite the current stability, Collins acknowledged the challenges posed by rising tariffs, which are expected to increase inflation and dampen economic growth in the short term. She noted that these factors complicate the Federal Reserve's monetary policy decisions, especially regarding potential interest rate cuts. 

Collins' comments come amid ongoing market volatility, with significant selloffs in U.S. government bonds and the dollar, and concurrent gains in gold and cryptocurrencies. Bitcoin, for instance, has risen to just below $84,000, up 6% over the past 24 hours. 

While the Federal Reserve remains vigilant and ready to act if market conditions deteriorate, Collins emphasized that, for now, markets are operating efficiently without signs of dysfunction.