Federal Reserve's Collins: The retreat of global economic integration may drive up inflation

Jinse Finance reported that Federal Reserve's Collins said on Friday that the retreat of global economic integration could make the Fed's work more complicated and increase price pressures. Collins pointed out that the shift towards "economic fragmentation" may "bring about a transitional period of inflationary pressure." She also stated that this environment could lead to a "lower degree of financial integration," thereby "raising domestic borrowing costs and more broadly impacting financial conditions." She said, "A more turbulent and fragmented global environment could lead to intensified business cycles and inflation volatility." She further noted that such an environment "could complicate the Fed's efforts to maintain price stability and maximum employment, especially if the supply-side component of economic shocks is larger in this new environment." Collins also stated that rising global risks and fragmentation "tend to suppress short-term economic activity while reducing long-term growth, and may become significant, transformative, and interwoven forces shaping the economic landscape in the coming years."