Federal Reserve Bank of Boston President Susan Collins recently expressed her belief that the US central bank can afford to be patient when considering interest rate cuts, suggesting that robust business and household balance sheets may mitigate the economic impact of tariffs.
In remarks made on Tuesday for an event organized by the National Association for Business Economics in Washington, Collins noted that “continued overall solid economic conditions enable the Fed to take the time to carefully assess the wide range of incoming data.”
She emphasized that an “‘actively patient’ approach to monetary policy remains appropriate at this time.”
Since the beginning of the year, Federal Reserve officials have opted to keep interest rates steady as they monitor the effects of significant policy changes initiated by President Donald Trump, particularly those concerning trade.
While most officials anticipate that tariffs will lead to increased inflation, recent economic reports have produced mixed results, leading to ongoing debates among policymakers regarding their ultimate effects.
Consumer price data released on Tuesday indicated that core inflation in June rose less than expected for the fifth consecutive month.
However, it also showed that tariffs were starting to affect the prices of certain goods.
Collins remarked, “In all, financial data point to the possibility that the impact of tariffs may be lessened somewhat by an ability for firms to decrease profit margins and for consumers to continue spending, despite higher prices.”
This suggests that the negative consequences of tariffs on labor market conditions and economic growth might be moderated.
Additionally, Collins mentioned that the Boston Fed had developed a new methodology to quantify how price changes at the US border affect domestic consumer prices.
She anticipates that the Fed’s preferred measure of underlying inflation will be around 3 percent by the end of the year, before beginning to decline again, compared to May’s rate, which stood at 2.7 percent.
In other news, social media platform Nextdoor is attempting to rejuvenate its image and enhance user engagement by partnering with local news providers.
On Tuesday, the company announced a collaboration with over 3,500 local news sources to provide regular contributions to the app.
In conjunction with this redesign, Nextdoor is expanding its capability to notify users about severe weather, power outages, and other emergencies, while also utilizing artificial intelligence to enhance recommendations for local restaurants, services, and points of interest.
CEO Nirav Tolia stated, “There should be enough value that we are creating for neighbors that they feel like they need to open up Nextdoor every single day,” acknowledging that this is not currently the case.
Nextdoor’s integration of local news stories offers users the chance to access relevant information from their neighborhoods directly through the app.
Upon launching this new feature, Nextdoor reports the availability of over 50,000 news stories, covering more than three-quarters of the app’s “neighborhoods.”
In technology news, Nvidia announced that the US government has lifted restrictions on the sale of its AI chips to China.
This reversal occurred three months after the Trump administration put a halt to Nvidia’s artificial intelligence chip sales to the Chinese market.
In a blog post on Monday, the company revealed that the US government approved sales of a specific AI chip designed for China, known as the H20.
While Nvidia will still need licensing approval from the government to fulfill these sales, the Trump administration “has assured Nvidia that licenses will be granted,” according to the company’s statement.
This decision followed a meeting between Jensen Huang, Nvidia’s CEO, and President Donald Trump, with Huang lobbying for continued access to the Chinese market for AI chip sales.
The massive potential of the Chinese market could translate to billions of dollars in sales for Nvidia, which recently became the world’s first publicly traded company to reach a $4 trillion market valuation.
Huang has been actively engaging with Chinese officials, including several visits to China, having most recently traveled to Beijing ahead of a scheduled news conference.
Neither the Commerce Department nor the White House offered immediate comments regarding this development.
In finance news, a federal judge in Texas has overturned a mechanism that would have allowed the removal of medical debt from consumer credit reports, impacting millions of Americans.
US District Court Judge Sean Jordan, appointed by President Trump, ruled on Friday that a finalized regulation by the Consumer Financial Protection Bureau (CFPB) exceeded its authority.
The judge stated that the CFPB is not permitted to remove medical debt from credit reports as stipulated by the Fair Credit Reporting Act, which safeguards data collected by consumer reporting agencies.
Had the rule been implemented, it could have increased the credit scores of millions by an average of 20 points.
The CFPB argued that its research shows outstanding medical debts are not a good predictor of repaying loans, even though they are frequently used to deny mortgage applications.
Additionally, last year, three major credit reporting agencies—Experian, Equifax, and TransUnion—decided to eliminate medical collections under $500 from US consumer credit reports.
The CFPB’s proposed rule aimed to entirely ban outstanding medical bills from credit reports and restrict lenders from relying on that information.
The agency estimated that about $49 million in medical debt would have been removed from the credit reports of roughly 15 million Americans.
Medical debt disproportionately affects marginalized communities, with 28 percent of Black Americans and 22 percent of Latino Americans carrying medical debt, compared to only 17 percent of white Americans, according to the CFPB.
In political news, New York City’s business leaders are preparing to engage with Zohran Mamdani, who recently won the Democratic mayoral primary amidst predictions of a potential exodus of wealthy investors.
Corporate leaders have labeled Mamdani a Marxist and an out-of-touch idealist, expressing concerns about the city’s prospects if he wins the general election in November.
Mamdani, an Assembly member from Queens, has organized meetings with the Partnership for New York City, which includes 350 stakeholders from the financial and corporate sectors, to discuss his vision for the city’s economic landscape.
These meetings, scheduled for Tuesday and Wednesday, are anticipated to be attended by over 100 executives, providing an opportunity for them to address their concerns directly with Mamdani.
Notably, the Partnership’s board features influential business figures including Henry Kravis from KKR, Rob Speyer of Tishman Speyer, and Jamie Dimon, CEO of J.P. Morgan.
Last week, Dimon criticized Democrats for falling over themselves to endorse Mamdani’s policy proposals, including city-operated grocery stores and a freeze on rent for stabilized apartments, labeling them as ideologically inconsistent.
The closed-door meetings present a critical moment for dialogue between Mamdani and New York City’s business elite ahead of the general election.
image source from：bostonglobe
