Fed Governor Michelle Bowman articulated that Fed is “not at that point” to initiate rate cuts. Additionally, she expressed readiness to increase rates further if progress on inflation “has stalled or reversed”.
“Should the incoming data continue to indicate that inflation is moving sustainably toward our 2% goal, it will eventually become appropriate to gradually lower our policy rate to prevent monetary policy from becoming overly restrictive,” Bowman said in a speech overnight.
However, “in my view, we are not yet at that point,” she emphasized. “Reducing our policy rate too soon could result in requiring further future policy rate increases to return inflation to 2 percent in the longer run.”
“While the current stance of monetary policy appears to be at a restrictive level that will bring inflation down to 2 percent over time, I remain willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed,” Bowman added.
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