What Susan Collins Wants to See Before Supporting Another Rate Cut

SPEAKER_2 (0:02)

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Tracy Alloway (0:18)

Hello, and welcome to another episode of the Odd Lots Podcast. I'm Tracy Alloway.

Joe Weisenthal (0:22)

And I'm Joe Weisenthal.

Tracy Alloway (0:23)

Joe, we're in Boston.

Joe Weisenthal (0:24)

I know, we've never done an Odd Lots thing in Boston of any sort, have we?

Tracy Alloway (0:29)

No, this is actually my first time in Boston. I've been to the airport a few times, but I've never actually stayed in the city, and everything I know about Boston comes from the Boston-New York rivalry as depicted in 30 Rocks, so I know nothing, basically.

Joe Weisenthal (0:43)

You know, when I lived in Vermont for several years in high school Boston, that was the big city, and people aspire to go to Boston. I knew a lot of people went to college here and stuff like that. I love it here. I'm excited to be here.

Tracy Alloway (0:55)

You know, the big city closest to my house in Connecticut is Worcester, Massachusetts. That's the big one.

Joe Weisenthal (1:00)

That's a nice city, too.

Tracy Alloway (1:01)

It's about 40 minutes away. All right. Well, the reason we are here is for the Boston Fed, which is holding their 69th Economic Conference, and the theme of this year's is the US economy in a changing global landscape, which is putting it mildly, I think.

Joe Weisenthal (1:17)

It is putting it mildly. There's a lot going on globally, all kinds of things. You could just run down the list. We don't even have to summarize it, but it is a time of change, both macro, big picture globally, but also just for the near term direction of monetary policy right now in the United States, probably as ambiguous as it's been in a while.

Tracy Alloway (1:37)

Yeah, I think so. And we're seeing that reflected in a lot of the Fed speak that's been coming out at the moment. We have doves on the one side who are talking about a deteriorating labor market. And then we have hawks on the other side who are still very concerned that basically after five years of inflation, we have still not returned to the 2% target. It's been half a decade.

Joe Weisenthal (1:56)

Right. And as of right now, we're recording this November 19th, 2025, the work function looking at Fed fund futures gives about a 45% chance of a rate cut in December. That was in the high 60s just a couple of weeks ago. So a lot of things, a lot of uncertainty, more or less a coin flip right now. We don't know what's going on in the medium term or the long term.

Tracy Alloway (2:18)

I'm going to say one more thing before we get to our very esteemed guest, but there is another complication, which is we've had the government shut down, right? So we haven't had a lot of the economic data. By the time this episode comes out, there might have been some of the economic data, but we also have Fed minutes that are due out later today. But to emphasize, as of this morning, everything is very, very uncertain.

Joe Weisenthal (2:43)

The fog, that's like the term everyone's using.

Tracy Alloway (2:45)

Yeah, there's a little bit of fog out in the Boston harbor right now as well. So fog, fog everywhere. Okay, so without further ado, we have the perfect guest to talk about the changing US economic landscape and what it means for monetary policy. We're going to be speaking with Boston Fed President Susan Collins. So Susan, thank you so much for coming on Odd Lots.

Susan Collins (3:06)

I am delighted to be here and welcome to Boston.

Tracy Alloway (3:09)

Thank you so much. I heard I'm supposed to eat beans and lobster. Is that right? All right, I'll do that.

Susan Collins (3:14)

All of it.

Tracy Alloway (3:15)

Okay, perfect. So tell us firstly about this research conference. What's the purpose of the Fed gathering people together to talk about, you know, you have a series of papers here all with different themes and topics. Why do this?

Susan Collins (3:29)

Sure. Happy to talk about our conference. And I have to say, I and our entire team are delighted that you are both going to be joining us for our day and a half conference.

Tracy Alloway (3:38)

We can't say no to a conference full of academic economic papers.

Joe Weisenthal (3:42)

Lots of PDFs during it.

Susan Collins (3:45)

Well, it will be quite meaty and informative. You know, it's not just academics. And that's one of the things that I think is really important to us. And one of the things that makes it particularly valuable. So we bring together, and this is the 69th Boston Conference. It's our flagship. You know, we do other meetings and conferences and other things, but this one is our flagship. And we bring together academics. Certainly, we bring together policy makers from different institutions. We bring together business leaders. We have a wide range of people. We actually have people from different disciplines. So one of the papers is from a political scientist as well. So that is kind of a hallmark of the conference is to really do a deep dive to understand dimensions of a topic. And we picked a pretty big one this time. So I'm not gonna suggest we're gonna cover the entire thing, but understanding the US economy in what is a changing global landscape related to risks and uncertainties, to fragmentation. It's a lot to talk about. And I'm really looking forward to being part of it, to learning and to hearing the presentations.