📶📶📶Federal Reserve Vice Chairman Publicly Sings "Dove": Rate Cuts Possible as Early as July!
Recently appointed by U.S. President Trump as the Vice Chairman responsible for oversight at the Federal Reserve, Bowman stated on Monday that the timing for interest rate cuts may be approaching rapidly, as her concerns about risks in the labor market are increasing, while she is less worried about tariffs triggering inflation issues. "It is time to consider adjusting the policy interest rate," Bowman said in remarks prepared for a gathering in Prague, Czech Republic. Bowman noted that inflation seems to be on a sustained path back to 2%, and she expects that trade policy will have "only a minimal impact" on inflation. Bowman stated, "If inflation pressures remain controlled, I would support lowering the policy interest rate as early as our next meeting to bring it closer to neutral levels and maintain a healthy labor market."
Last week, the Federal Reserve kept its overnight target interest rate range unchanged at 4.25% to 4.5%. Due to significant economic uncertainty caused by Trump's trade policies, officials remain in a wait-and-see mode. Federal Reserve officials are concerned that soaring import taxes could simultaneously reignite already cooling inflation pressures while suppressing economic growth.
In her speech, Bowman expressed her support for the Federal Reserve’s decision to keep rates unchanged last week, but she seemed to believe that the economic outlook is much less gloomy moving forward, stating that the prospects are becoming clearer.
While continuously insulting Powell, Trump has repeatedly pressured the Federal Reserve to make significant interest rate cuts. Bowman pointed out in her remarks that the labor market is currently in good shape, but she is more concerned about the outlook for that sector, which is part of the reason for her dovish monetary policy stance.
"We should also recognize that given recent weak spending and signs of weakness in the labor market, the downside risks to our employment objectives may soon become more pronounced," Bowman stated.