Fed's Bowman: More progress on inflation is needed before further rate cuts

Federal Reserve Governor Michelle Bowman said on Monday that while monetary policy “is now in a good place,” she wants to see data reflect more progress on inflation before cutting interest rates further. 

“I would like to gain greater confidence that progress in lowering inflation will continue as we consider making further adjustments to the target range,” Bowman said in a speech at the American Bankers Association. 

Rising core goods price inflation since last spring has slowed progress, Bowman said. While she expects inflation to continue to decelerate this year, she said disinflation “may take longer than we would hope.” 

“I continue to see greater risks to price stability, especially while the labor market remains strong,”  Bowman said.

The most recent consumer price index showed inflation trended higher than expected in January, rising 0.5% month-over-month versus the Dow Jones estimate calling for a 0.3% rise. This put the annual inflation rate at 3%, coming in above consensus forecasts for 2.9%

The Fed maintained its target rate at a range of 4.25% to 4.5% at its January policy meeting.

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