Federal Reserve Bank of Boston President Susan Collins told the Financial Times in an interview released on Friday that the United States central bank "would absolutely be prepared" to act to stabilize the financial markets if needed.

Collins noted that markets still continue to "function well" despite recent volatility sparked by the raging trade war that escalated due to US President Donald Trump's tariff announcements. Still, she insisted the Fed has "tools to address concerns about market functioning or liquidity should they arise."

The Fed official also noted that inflation is expected to climb "well above" 3% this year, but pointed out that emergency rate cuts would not be the best way to address liquidity and market functioning.