Citing constantly rising inflation, Federal Reserve Governor Michelle Bowman warned Wednesday that the central bank should proceed cautiously in more monetary easing.
“I would prefer to proceed cautiously in bringing the policy rate down to better assess how far we are from the end point, while recognizing that we have not yet achieved our inflation goal and closely watching the evolution of the labor market,” Bowman stated in a prepared speech delivered in West Palm Beach, Florida.
Bowman was the only dissenter at the September Federal Open Market Committee meeting, supporting a 25-basis-point drop instead of the committee's 50 basis point goal lowering of the federal funds rate. She did, however, advocate a quarter-point rate reduction at the November meeting, therefore narrowing the policy rate range to 4.5% to 4.75%.
Bowman pointed out that notwithstanding notable cuts since early 2023, inflation development has halted recently. Since May, the Federal Reserve's favored inflation gauge—the core personal consumption expenditures price index—has been constant at around 2.7% year over year.
Federal Reserve Governor Lisa Cook said earlier on Wednesday that more rate reductions would be suitable given the balanced risks to the Fed's dual goals of price control and employment.
Bowman's comments highlight continuous discussions among Federal Reserve members on the speed and extent of monetary easing in view of a mixed economic situation.
