FREEPORT, Maine — Dr. Susan M. Collins, the new president of the Federal Reserve Bank of Boston, was in Maine Wednesday to meet with Gov. Janet Mills and a number of business leaders.
Collins made stops in Bath, Augusta, Freeport, and Portland to talk about the current economic challenges facing the state.
"We're in a current environment where the very high inflation is just taking a toll on everybody," Collins told NEWS CENTER Maine in an exclusive interview.
The conversation followed a round-table discussion facilitated by L.L. Bean CEO Stephen Smith at the company's corporate headquarters in Freeport.
Collins said the data do not show we are experiencing a recession but did not rule out the possibility and predicted a continued economic "slowdown."
"We are focused and resolute and have the tools to bring inflation back down to the two-percent target," Collins said.
The Federal Reserve raised interest rates by another 0.75 percent three weeks ago, as they continue their attempts to cool inflation and achieve a "soft landing."
Collins, who is a voting member of the Federal Reserve's Open Market Committee, told NEWS CENTER Maine those higher rates are likely to remain and could even continue to climb.
"I am anticipating or expecting additional interest rate changes," she said.
Aside from interest rates, the challenge of finding enough workers to meet demand and housing availability were two topics that came up throughout her visit, according to Collins.
She said Maine's aging population plays a big role in the struggles facing the labor market in particular.
"Those are long standing challenges, and we know that they've been exacerbated," she said.
When asked about the impact rising interest rates have on new homeownership and access to housing, Collins said she believes achieving long-term economic stability will help everyone.
She would not speak directly to how President Joe Biden's new student loan forgiveness plan might factor into the worsening housing crisis and inflation more broadly.
Collins did however note that some areas in the country are seeing the cost of homes go down.
"I would say that there are a variety of reasons for why there's strong demand and it's hard to know how different types of infusions will play out," she said.
In her new role, Collins vowed to use her experience and resources to work with Maine stakeholders moving forward.
She said the Fed will continue to its work to get inflation under control and achieve stability, but it will require a continued economic slowdown and an increase in unemployment.
Collins also acknowledged that low- and moderate-income families will be hit the hardest.
"That's challenging. I think it's important for us to recognize that," she said. "There is good reason to be optimistic that the slowdown we're anticipating will be mild, as we try and work hard to bring demand better into alignment with our productive capacity," she said.
Collins was named president of the Federal Reserve Bank of Boston in March. She is the first woman of color to hold the position.