The Federal Reserve (FED) Bowman: Easing inflation pressures will support rate cuts follow employment risks.

On June 23, The Federal Reserve Board of Governors member Bowman stated: “If inflationary pressures are under control, I will support dropping the policy interest rate as soon as possible at the next meeting to bring it closer to neutral levels and maintain a healthy labor market.” Bowman has been very focused on inflation risks since last year.

She said that due to the expectation of more idle capacity in the economy this year, she believes that the price increases resulting from tariffs will be “moderate and one-time.” She described the labor market as solid and expected it to be close to full employment levels.

However, she also cited evidence of vulnerabilities, including weakened labor market vitality, slowing economic growth, and a narrow concentration of job growth, and thus believes that the Federal Reserve should “place greater emphasis on the downside risks to the employment objective” in future decision-making. This is the first substantial comment on the economic outlook made by Bowman since being nominated by Trump and confirmed by the Senate as Vice Chair for Supervision of the Federal Reserve this spring.