(Nov 14): Federal Reserve Bank of Boston president Susan Collins said additional interest-rate increases will be needed soon as price pressures are broadening.

She stopped short of revealing what she thought would be the right pace for hikes.

“Soon, some additional firming — tightening of policy — is appropriate,” Collins said during an interview with Bloomberg Television on Friday. “It does seem to me that the appropriate direction for monetary policy is clear.”

Asked about remarks from other policymakers backing a half percentage point move in December, or back-to-back hikes, the Boston Fed chief demurred.

“I don’t want to get ahead in terms of how high we should go or how fast,” she said.

Collins added there’s evidence price pressures are broadening beyond those related to higher energy costs.

“Energy is clearly one of the drivers,” she said. “But I do see it as broader than that. I see demand as having been quite solid, quite healthy.”

After tightening monetary policy for the first time in three years in September, Fed officials held their benchmark rate steady last month. Several policymakers have signalled their support for a rate increase in December following hotter-than-expected inflation data for October. Investors currently anticipate hikes in December and January, with a third in either March or April, based on federal funds futures pricing.

Earlier on Friday, Collins signalled tighter monetary policy may be needed to cool prices even if that meant limiting housing affordability. The Boston Fed chief said ensuring price stability will benefit both the housing market and the overall economy in the long run.

“In the near term, the higher interest rates sometimes needed to cool the economy and keep inflation in check can make homes more expensive to buy and to build,” Collins said in remarks prepared for the Boston Fed’s annual economic conference. “But over the longer run, stable prices create predictable economic conditions that are good for housing.”

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