01:47 PM EDT, 09/30/2025 (MT Newswires) -- Boston Federal Reserve President Susan Collins on Tuesday expressed willingness to support additional interest rate cuts this year, saying she now sees "limited" upside risks to inflation.

In remarks prepared for delivery at the Council on Foreign Relations in New York, Collins said that inflation is expected to remain elevated into next year, but ease back to the 2% target over the medium term.

While job growth has slumped in recent months amid lower labor supply and demand, hiring will likely pick up as companies adjusted to the new tariff environment, she said.

"In this highly uncertain environment, I do not rule out scenarios featuring higher and more persistent inflation, more adverse labor market developments -- or both," Collins said. "Still, with less scope for inflationary pressures from the labor market, the upside inflation risks I was concerned about a few months ago are more limited."

The Federal Open Market Committee voter said "it may be appropriate to ease the policy rate a bit further this year," subject to incoming data.

Collins' remarks added to divergent views from Fed policymakers following the FOMC's decision earlier this month to lower its benchmark lending rate by 25 basis points.

Last week, Fed Chair Jerome Powell said the central bank faced a "challenging situation," with near-term risks to inflation tilted to the upside and those to employment leaning downside. Newly appointed Fed Governor Stephen Miran said that the policy rate should be two percentage points lower than where it currently is, while St. Louis Fed President Alberto Musalem cautioned against further rate cuts.

"My baseline outlook doesn't see the labor market softening much further -- but there are risks," Collins said Tuesday. "In particular, I see some increased risk that labor demand may fall significantly short of supply, leading to a more meaningful and unwelcome increase in the unemployment rate."

Late last week, Richmond Fed President Tom Barkin said that downside risks to employment will likely be limited, while Fed Vice Chair for Supervision Michelle Bowman reiterated that policymakers are at a "serious risk of already being behind the curve" in addressing a weakening labor market.

The odds of the FOMC again cutting interest rates by 25 basis points next month jumped to 97% on Tuesday from 90% on Monday, according to the CME FedWatch tool.